Mumbai: Toshiba Corporation of Japan has entered into an agreement with the OP Jindal Group to set up a joint venture to manufacture and market super-critical steam turbines and generators for thermal power plants. The joint venture, to be set up by June this year, will compete with public sector leader BHEL and engineering giant L&T who dominate the Indian market now.
The new company will have an initial capital of $50 million, of which Toshiba would hold 75 per cent and the OP Jindal Group 25 per cent - to be held by group companies JSW Steel Limited (5 per cent) and JSW Energy Limited (20 per cent).
The manufacturing operations are expected to start in September 2009 and the companies are currently deciding on the location.
Toshiba, which already has a presence in India, had won a major contract to supply five large super-critical steam turbines and generators to Tata Power, India's largest private power sector utility.
The scope of the joint venture includes design, manufacture, marketing and maintenance services of mid- to large-sized steam turbines and generators, ranging in size from 500-megawatts (MW) to 1.000MW that will be deployed in highly efficient supercritical thermal power plants.
"This alliance is aimed at giving us an advantage in the Indian energy sector. The JV is aimed at responding to expanding electricity demand in tandem with India's economic growth," S S Rao, joint managing director and CEO, JSW Energy Limited, said.
"This investment is a significant step for Toshiba, one that will give us a firm foothold in the rapidly growing Indian market for thermal power generation," said Atsuhiko Izumi, executive vice resident of Toshiba's Power Systems Company.
The JV partners are now seeking a site of some 400,000 square meters on which to develop facilities, and expect to invest some $250 million in plant and manufacturing equipment. Keihin Operations, Toshiba's power equipment production facility in Yokohama, Japan, will complement the V's effort to ramp-up the manufacturing process in the beginning.
The JV aims to establish an independent production scale of 3,000MW a year. Marketing activities will start in June 2008.
Toshiba currently operates a steam turbine and generator manufacturing facility in Yokohama, near Tokyo; the Indian joint venture will be the company's second such manufacturing base and will strongly support the long-term development of Toshiba's power systems business.
JSW, a part of O P Jindal Group, has interests in mining, carbon steel, power, industrial gases, port and infrastructure and IT. JSW Steel Limited is one of the lowest cost steel producers in the world. It is engaged primarily in manufacture of carbon steel products viz. H R Coils, C R Coils, Galvanised/Galvalume products, auto grade / white goods grade CRCA Steel, Bars and Rods.
JSW Energy is working on power solutions in the states of Karnataka, Maharashtra, Rajasthan and Himachal Pradesh. The company has 3,670 MW of generating capacity in the operational, construction or implementation phase. In addition, it has power generation projects under development with a proposed combined installed capacity of 9,600 MW. The company is an early entrant in the power trading business and is currently exploring options in the power transmission business, power distribution business, generation through non-conventional energy sources and tie-ups with well known equipment manufacturers and suppliers.