Chennai: Sumitomo Pipe & Tube Co.,Ltd and Sumitomo Corporation have reached an agreement with Hyundai Hysco Co., Ltd, the largest steel manufacturer in South Korea, to establish a joint manufacturing and sales venture in India for automotive steel pipe.

The Joint Venture - Automotive Steel Pipe India Private Limited - will have a production capacity of approximately 4,000 tons per month of Electric resistance welded pipe (carbon steel, stainless steel) and cold drawn steel pipe. It will employ approximately 350 people.

The company has reached agreement with an Indian subsidiary of Hysco (Hysco Steel India Private Limited) that owns land in Chennai to establish the manufacturing facility.

Automotive Steel Pipe India Private Limited (Hysco Steel India Private Limited 55%, SPT & SC Investment Co., Ltd. 45%) will invest about 400 million rupees (approx. 3.6 billion yen) in setting up the plant. This is scheduled to be established by August 2011 and the production is expected to commence by the end of 2012/

The 25,800 sq.mt factory will come up on a land area of51,600 sq.mts. The plant will have 2 electric resistance welded tube mills, 2 draw benches, 1 heat treating furnace, 3 quenching machines and other equipment.

It is targeting Japanese automobile manufacturers, Hyundai Motor Company, the largest automobile manufacture in South Korea, and European and American automobile manufacturers.

"India's automotive industry is expanding rapidly thanks to the strong economic growth. With this, demand for automotive steel pipe is expected to expand, with significant growth particularly anticipated for stainless steel exhaust pipes, steel pipes for front forks, door impact beams and other high strength steel pipes as a result of tighter environmental restrictions and the growing demand for safety enhancements.With a view to filling the growing demand for automotive steel pipe in India, Sumitomo Pipe & Tube and Sumitomo Corp. have considered starting an automotive steel pipe business in Chennai, Tamil Nadu State in the southern part of the country, where automotive industries are concentrated," the company said in a statement.