Arcelor, which was formed recently with the merger of USINOR, Arbed and Aceralia has a capacity of about 47 million tonnes per annum and is the largest steelcompany in the world. Nippon Steel with a capacity of about 25 milliontonnes per annum is the third largest steel company in the world. Both Arcelor and Nippon Steel have a proven track record of technical expertise required for making steel products for the automotive industry all over the world.

As a result of this tripartite agreement, Nippon Steel and Arcelor will assist Tata Steel in its efforts to cater to the requirement of high quality steel sheets of the Indian automotive industry.

As a pre-cursor to this agreement, Nippon Steel and Tata Steel had signed an agreement earlier whereby Nippon Steel is already assisting Tata Steel for the production of automotive cold rolled sheets. Arcelor and Tata Steel have begun studies on the requirement of galvanised steel sheets for use in India in the automotive industry. From now on, the three steel companies will work together on fulfilling the specific requirements of all automotive customers in India, especially with regard to their technical needs. The subjects covered in this agreement include joint activities required for a wider acceptance of high tensile and galvanised steel sheets amongst the automotive customers in India keeping the requirements of safety, environment, and reduced car weight in view.

The three Steel Companies are confident that the results of this automotive Steel Technology Co-operation Agreement will provide the Indian automotive customers with effective steel solutions and make them technologically up-to-date thereby keeping them competitive. Indian automotive customers will get greatly benefited by receiving this global technical assistance.

This tripartite agreement is a part of the strategic alliances that are beginning to happen in the steel industry at a global level. There is increasing consolidation and alliances already happening in the global automotive industry and in order to serve the needs of the automotive industry, it is necessary that steel companies also come together in strategic alliances. This the first time an Indian company has entered into a strategic alliance with two of the most leading producers of automotive steel in the world. "The strategic alliance will greatly enhance the capability of Tata Steel to serve the Indian automotive customers to global standards of quality and service" said Mr. B. Muthuraman, Managing Director of Tata Steel.

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