Two Indian steel firms seek cooperation with CSC

Jan 26, 2005 Ι Industry In-Focus Ι General Items Ι By Ben, CENS
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Taipei, Jan. 26, 2005 (CENS)--Two large-sized steel firms of India are said to seek the cooperation of Taiwan's China Steel Corporation (CSC), opening a door for domestic iron and steel industry to deploy in the south Asian nation.

One of the two Indian firms has no blast furnace but hopes to develop the upstream steel industry. The other is concentrating on the production of round steel rods. Both said they have enough capital to extend business scope and would seek CSC's cooperation to develop higher-level manufacturing technologies.

Due to signing confidential accords with the two Indian firms, CSC keeps lips sealed about the cooperation details. But CSC said it has made appropriate assessment on offering technical supports to the two Indian firms.

It is reported the two Indian firms have also sought similar cooperation with large-sized steel firms in Japan and South Korea. Accordingly, CSC said it would take a more aggressive action to finalize the cooperation project with the two Indian firms.

India is considered to become another global production center for the iron and steel industry after mainland China. Currently many steel firms from Europe, Australia, Brazil, South Korea and Japan have invested more than US$21.7 billion in India. Seeing the aggressiveness of rival companies from the above-mentioned nations, CSC hopes it can speed up the pace of investing in India's iron and steel sector.

CSC said is would soon launch a blast furnace investment project in Taichung Port, central Taiwan. If everything goes smoothly, the proposed blast furnace will have an annual output of four million metric tons of steel products after it is inaugurated.

On the other hand, Formosa Plastics Group, Taiwan's leading petrochemical producer, has officially proposed to launch a large-sized steel mill in Yunlin County of central Taiwan with an annual production capacity of 7.5 million metric tons of steel products. Elan Group, another steel conglomerate based in Kaohsiung County of southern Taiwan, is considering rekindling its formerly proposed steel mill project in Taiwan.

With the ambition of the above-mentioned three business groups, Taiwan will face an oversupply of iron and steel, which will force domestic steel makers to turn to overseas markets.

An industry insider said India features abundant storage of iron ore. At present India ranks as the world's third-largest exporter of iron ore, only behind Brazil and Australia. It is estimated that India's iron ore reaches 13.5 billion metric tons with another seven billion metric tons not yet exploited.

Consumption of iron and steel in India reaches tens of kilograms per person per year, compared to more than 600kgs posted in some industrialized nations. Accordingly, the underdeveloped India market has drawn the attention of the steel manufacturers obtaining blast furnaces the world over.

An industry analyst predicted India would see annual consumption of iron and steel reach 100 million metric tons in 2020.
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