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Steel Cos may seek tie-ups with global majors

18 May 2011 Evaluate

Indian companies are planning to form strategic tie-ups with global majors such as Arcelor Mittal and ThyssenKrupp to access new markets, instead of bidding for these large units which will be expensive.

Jindal Stainless and SAIL are the two large stainless steel companies that could likely look at adding larger and bigger customers by collaborating with the global majors, and also by adopting newer technology as part of the global restructuring in the stainless steel industry.
While hot-rolled coils, the base grade category for carbon steel, is priced at an average of Rs. 37,000-38,000 a tonne, stainless steel is at more than Rs. 1,20,000 a tonne. Indian stainless steel producers are of comparatively smaller size at 1.5 million tonne, while global majors, such as ThyssenKrupp, are more than double that size. The Indian market is growing, but has been using mainly low-end products. Indian steel companies may look for R&D technology, new applications and support new product development, instead of eyeing equity tie-ups with global majors.

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