Essar Steel ties up with Japan firm

Ahmedabad: In the first of its kind in India, the Hazira-based Essar Steel (ESL) announced an umbrella agreement with Kobe Steel of Japan, gaining operational technology to manufacture higher quality steel products.

The agreement was signed by Mr Dilip Oommen, CEO (India), ESL, and Mr Koichi Onishi, Executive Officer of Kobe Steel and General Manager of its Kakogawa works.

The agreement also envisages supplying certain resources to Kobe, such as slabs and other raw materials, ESL said here.

“This agreement will further strengthen Essar Steel’s product portfolio to enable it to produce steel for high-end applications in the auto segment, besides other technical guidance in certain areas. In addition, it opens the possibilities of working on joint projects in future,” said Mr Oommen.

“The agreement provides the framework for the two companies to discuss areas of cooperation,” said Mr Onishi. “It creates a win-win collaborative relationship to provide both Kobe Steel and Essar with mutual benefits,” he said.

The umbrella agreement also envisages quality control and technological improvements in the steel plant and their operation, pollution control and energy consumption control at steelworks, product improvement for automotive steel.

In February, Kobe Steel had agreed to provide Essar with technical guidance on the production and quality control of automotive steel sheet, as well as facility diagnosis. Both companies saw the value of deepening their relationship, which consequently led to the formation of the umbrella agreement.

Capital tie-ups between Kobe Steel and Essar are neither planned nor foreseen in the future, the company added.