Steel makers such as Tata Steel, JSW, Essar Steel and Steel
Authority of India Ltd (SAIL) are gearing up to cater to the surge in demand
from domestic auto sector.
Though a large portion of the steel used for manufacturing
vehicles is currently imported, steel makers are now investing heavily in fresh
cold-rolled (CR) steel, used by the auto and white goods sectors.
The gross demand from the auto industry – the second largest
(after construction) at nine per cent of steel consumption, is expected to
cross 10 million tonnes per annum (MTPA) by 2016, from the current 6.7 MTPA.
“With all major car manufacturers setting up new production
facilities to cater to both the domestic as well as export markets, India is
likely to become a global manufacturing hub very soon. Neither SAIL nor any
other major steel producer can afford to overlook such an important sector,” Mr
C S Verma, Chairman of SAIL.
Tata Steel is also increasing CR steel capacity by 20 per
cent to 1.2 MTPA, this fiscal. It supplies over 40 per cent of the domestic
steel sourcing for the automotive industry.
Meanwhile, JSW said also earlier this year that it would set
up a 2.3 MTPA CR mill at its Vijayanagar facility, the initial phase of which
will be ready by the first quarter of 2012-13.
In order to gain expertise to make higher grades of steel,
companies are also entering into technical tie-ups with global steel makers.
Improved grades such as high-strength steel, is needed by
automakers to reduce vehicle weight and maintain structural rigidity. While JSW
has collaborated with JFE from Japan and Essar with Kobe Steel, Tata Steel has
a joint venture with Nippon. SAIL is also in talks with both Kobe and Posco for
auto-grade steel.
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