Japan’s Sumitomo Metal Industries Ltd is considering spending up to US$3 billion to build a steel plant in India with a local partner, a report said yesterday.
Sumitomo Metal, Japan’s third-largest producer of crude steel, is mulling a joint venture in the eastern state of West Bengal with Indian producer Bhushan Steel Ltd, the Nikkei business daily said without naming its sources.
The total investment in the blast-furnace steel plant is expected to be ¥200 billion to ¥300 billion (US$2 billion to US$3 billion), the daily said.
The joint venture is expected to be majority owned by Bhushan, with Sumitomo holding a 30 percent to 40 percent stake, the newspaper said.
The Japanese company did not confirm the report and said in a statement that nothing concrete had been decided.
The Nikkei said the plant would turn out semi-finished steel products, as well as steel sheet and other finished products, from around 2015, although a feasibility study and talks with Indian authorities have not yet started.
The project would mark the first time a major Japanese steelmaker oversees construction of a blast furnace in India, it said.
The global recession has curbed steel demand in emerging economies, but Sumitomo Metal sees Indian demand increasing from infrastructure projects and the growth of the automobile industry, the daily said.
Under a tie-up since the late 1990s, Sumitomo has been providing technical assistance to Bhushan for a blast furnace plant in the eastern state of Orissa, which is due to start operations next year.