Essar Steel and Kobe Steel sign umbrella agreement

Tuesday, 02 Dec 2008

Essar Steel Limited has announced an umbrella agreement with Kobe Steel Ltd of Japan. The agreement was signed by Mr Dilip Oommen CEO (India) Essar Steel and Mr Koichi Onishi executive officer of Kobe Steel and GM of its Kakogawa works. This is the first of its kind agreement signed by Kobe with any Indian steel major.

Through this agreement, Essar will gain operational technology to manufacture higher quality steel products. The agreement also envisages supplying certain resources to Kobe such as slabs and other raw materials.

The umbrella agreement will encompass the following. Quality Control and production for Steel, Technological improvements in the steel plant and their operation, Pollution control and energy consumption control at Steel works, Product improvement for automotive steel.

However, c ups between Kobe Steel and Essar are neither planned nor foreseen in the future.

Mr Dilip Oommen CEO Essar Steel said that “This agreement will further strengthen Essar Steel’s product portfolio to enable it to produce steel for high end applications in auto segment besides other technical guidance in certain areas. In addition, it opens the possibilities of working on joint projects in future.”

Mr Koichi Onishi of Kobe Steel said that "The agreement provides the framework for our two companies to discuss areas of cooperation. He said that it creates a win to win collaborative relationship to provide both Kobe Steel and Essar with mutual benefits."

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 umbrella agreement.

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 tonne of crude steel and had consolidated sales of JPY 2.1 trillion. Employees in the Kobe Steel Group numbered 33,657.