Nippon Steel Corp, the world’s No.4 steelmaker, and Tata Steel Ltd said on Friday their $480 million cold-rolled sheet steel joint venture will begin production in India by late 2013. The 600,000-tonnes-a-year plant, which targets India’s surging automotive sheet steel market, will be the first production base for a Japanese steel maker in India. ”India’s huge growth potential is very attractive,” Junji Uchida, Nippon Steel managing director, told a news conference.

“We also see a big advantage in linking up with Tata, which has high self-sufficiency rates in iron ore and coal, and a big cost advantage.” India’s growing manufacturing sector is expected to become a base for exports to the Middle East, Africa and Europe, he said. India’s car market of around 2.4 million units a year is growing 15-20 percent annually. Tata has a self-sufficiency rate of 100 percent for iron ore and 50 percent for coking coal, Anand Sen, vice-president of Tata Steel Ltd, said.

Other leading Japanese steelmakers — JFE Holdings Inc, Sumitomo Metal Industries Ltd and Kobe Steel Ltd — have forged technology tie-ups with players in India. JFE owns a near-15 percent stake in JSW Steel. Nippon Steel and Tata agreed to continue talks aimed at expanding co-operation, including construction of the upstream process, the two companies said. While India’s steel demand is growing rapidly, capacity additions lag due to difficulty in acquiring land and opposition from farmers.

Tata Steel plans to boost production capacity from 7 million tonnes a year to 10 million in 2011 and 30 million by 2020, Sen said. The joint venture, to be built on the site of Tata’s plant in the eastern Indian town of Jamshedpur, will be 51 percent owned by Tata and 49 percent by Nippon Steel. The firms signed a memorandam of understanding on the project in April 2010.

($1=83.51 Yen)