Basic Agreement on Investment in the Specialty Steel Business in India

Sumitomo Corporation (head office: Chuo-ku, Tokyo; President & CEO: Kuniharu Nakamura) and Mukand Limited (head office: State of Maharashtra, India; Representatives: Niraj Ramkrishna Bajaj, RajeshViren Shah) have reached a basic agreement in which Sumitomo Corporation will acquire 49% of the shares of Mukand Alloy Steels Private Limited (“MASPL”), a subsidiary of Mukand that manufactures specialty rolled steel, and participate in its operation. Under the agreement, MASPL will process semi-finished specialty steel products supplied exclusively to the firm by Mukand from its plant in Hospet, and sell processed products.

In India, against a background of rapid economic growth, the consumer base for automobiles has recently been expanding. In terms of market size, India ranks first and fifth in the world for two-wheeled and four-wheeled vehicles, respectively; and in Asia, the country has become the third largest market following China and Japan. Based on current trends, strong growth in automobile production and sales volume is expected in India, among other countries, for years to come. This implies rising demand for specialty steel used for automobile manufacturing in the expanding regional market.

Mukand manufactures specialty steel and stainless steel in two plants in India. Its specialty steel products are supplied mainly to local automakers as materials for a broad range of auto parts, from transmission gears and steering units to suspensions and fasteners.  

Sumitomo Corporation has been engaged in the supply of steel, particularly specialty steel, for automotive applications for many years. Utilizing our solid knowledge and customer network built over years of steel trading, we aim to become a leading supplier of a full-range of steel materials and parts for auto manufacturing and related sectors.

Prior to this current development, Sumitomo Corporation and Mukand had jointly established Mukand Sumi Metal Processing Ltd. in 2012, to launch the manufacturing and sales of secondary processed specialty steel and stainless steel products in India. This new investment in the specialty rolled steel manufacturer, an upstream supplier for the secondary processed steel venture, is a step that will strengthen Sumitomo Corporation’s supply chain function in India, with a view to meeting the expected increase in demand for specialty steel driven by the expanding regional automobile market and increasing local sourcing of materials.

Bringing together Mukand’s manufacturing and engineering capabilities and Sumitomo Corporation’s sales expertise and management know-how, we will grow the specialty steel business in India.