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Essar Steel and Kobe Steel Sign Umbrella Agreement

12/02/2008 - ABSTRACT: Essar Steel signs umbrella agreement with Kobe Steel that will cover a range of steel quality and production control technologies for Essar, as well as the supply of slabs and other raw materials to Kobe Steel.

Essar Steel Limited has signed an umbrella agreement with Kobe Steel Ltd of Japan, the first such agreement that Kobe has signed with any India Steel Major.
 
The new agreement will help Essar gain operational technology to manufacture higher-quality steel products. It will cover such technologies as quality control and production for steel; technological improvements in the steel plant and their operation; pollution control and energy consumption control at steel works; and product improvement for automotive steel.
 
“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” said Dilip Oommen, CEO (India), Essar Steel.
 
Kobe Steel had agreed in February 2008 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 formation of the umbrella agreement. The agreement also envisages supplying certain resources to Kobe such as slabs and other raw materials.
 
"The agreement provides the framework for our two companies to discuss areas of cooperation," said Koichi Onishi of Kobe Steel. "It creates a win-win collaborative relationship to provide both Kobe Steel and Essar with mutual benefits," he said.
 
Kobe Steel and Essar do not plan any capital tie-ups between the two companies, nor do they foresee such tie-ups in the future.
 
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.

Essar Steel Limited, part of Essar Global Limited, is a fully integrated flat carbon steel manufacturer—from iron ore to ready-to-market products. Essar Steel has a current capacity of 4.6 million tonnes per annum. Essar Steel produces highly customized products catering to a variety of product segments and is India’s largest exporter of flat products to the highly demanding U.S. and European markets, and to the growing markets of Southeast Asia and the Middle East. It has invested in downstream capabilities to evolve from being a product-based company to becoming a value-added service provider. It has a global network of retail steel outlets, called Steel Hypermarts, and offers services, like cutting, slitting and blanking of steel sheets, through specialized Steel Service Centers worldwide.

Essar Global Limited (EGL) is a diversified business corporation with a balanced portfolio of assets in the manufacturing and services sectors of Steel, Energy, Power, Communications, Shipping Ports & Logistics, Construction and Mining & Minerals. Essar Global has an asset base of USD 14.5 billion, and employs more than 50,000 people across offices in Asia, Africa, Europe and the Americas.