JSW in pact with Japanese co for auto-grade steel

JSW Steel has entered into a technical pact with JFE Steel Corporation of Japan to produce auto-grade steel at its Vijayanagar plant in Karanataka. The alliance’s priority right now was automotive steel which would be taken to the next level of equity partnership in the greenfield projects proposed in West Bengal and Jharkhand.

The tie-up will also help the company produce high-grade skin panels, now being imported, for cars and bikes. JSW produces 0.8 million tonne of cold rolled coil for carmakers such as Hyundai, Bajaj Auto, Ashok Leyland, Tata Motors and is in the process of getting approval from Toyota India, Ford India, General Motors India and Maruti Suzuki.

Auto-grade steel is lighter than the conventional steel as it is intended to aid in cars achieving greater levels of fuel efficiency. Globally, cars are getting lighter with an eye on emission standards and higher mileage, especially with fuel getting dearer. This is where auto grade steel could play a key role.

Automakers in India import 70-75 per cent of high-grade automotive steel for outer panels of cars and other vehicles. The import duty of five per cent puts pricing pressure on companies producing it locally. The sale of auto-grade steel accounted for about 15 per cent of the company’s total revenue.

Established in 2003, the JFE group was formed from the integration of Kawasaki Steel and NKK Corporation of Japan. It is now the second largest steel company in Japan with an annual production of 33 million tonnes and ranks sixth globally.