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Kobe Steel and Essar Steel form cooperative umbrella agreement
December 1, 2008
TOKYO, December 1, 2008 - Japan's Kobe Steel, Ltd. and India's Essar Steel, Limited
announce that they have entered into an umbrella agreement to study technical
guidance to Essar, the supply of resources to Kobe, and the possibility of working
on joint projects.
The umbrella agreement, signed in India on November 29, provides the framework
for the companies to discuss areas of cooperation. Kobe Steel and Essar will
then form individual contracts for each project. The umbrella agreement creates
a win-win collaborative relationship to provide mutual benefits to the companies.
The areas of cooperation under study cover three categories.
*From Kobe Steel to Essar, the following technical guidance projects will
be studied:
1.
Quality control and production control for steel sheet and plate
2.
Technology concerning steelworks facilities and their operation
3.
Pollution control and energy consumption control at steelworks
*The agreement also envisages Essar supplying certain resources to Kobe such
as slabs and other raw materials.
*Kobe Steel and Essar intend to study collaborating on joint projects in
the Indian market.
Kobe Steel and Essar have a previous history of collaboration. At Essar's
Hazira Works, five MIDREXR® Direct Reduction Plants are in operation, providing
a production capacity of 5.1 million metric tons per year. A sixth module,
with a capacity of 1.5 million metric tons per year, is currently under construction.
The MIDREX Direct Reduction Process is owned by Kobe Steel.
In February 2008, Kobe Steel 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.
The Indian economy is anticipated to grow tremendously over the medium- to
long-term future. Steel demand is expected to steadily increase along with
the need for high-performance steel products. Through the collaborative agreement,
Essar will gain operational technology to manufacture higher quality steel
products and further improved its presence in the Indian market. Kobe Steel
gains by expanding its sources of raw materials and iron units. It also benefits
from potential opportunities to enter the Indian market for upper-end steel
products.
Capital tie-ups between Kobe Steel and Essar are neither planned nor foreseen
in the future.
About Kobe Steel
Kobe Steel, Ltd. is one of Japan's leading steelmakers and producers of aluminum
and copper products. Other businesses include welding consumables, industrial
machinery, engineering, construction equipment and electronic materials.
In the year ended March 2008, Kobe Steel produced 8.07 million metric tons
of crude steel and had consolidated sales of 2.1 trillion yen (US$21.3 billion).
Employees in the Kobe Steel Group numbered 33,657. More information is available
at: www.kobelco.com
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