JSW Steel in equal joint venture pact with Japan’s Marubeni-Itochu for high-end products
13 Oct 2011
JSW Steel Ltd, part of the O P Jindal group, on Wednesday announced a 50:50 joint venture with Japan's Marubeni-Itochu Steel Inc for a steel processing facility in north India, to be named JSW MI Steel Service Centre Pvt Ltd.
The joint venture will set up a 180,000 tonnes per annum processing facility at a cost of Rs122 crore to cater to clients in the automotive, white goods, construction and other value-added segments. Funding will be shared through an equal portion of equity and equal debt raised by the partners.
The joint venture company will be equipped to process flat steel products such as hot rolled, cold rolled and coated products with a view to offering just in time solutions to these segments. The plant is likely to be located at Gurgaon in Haryana, near Delhi. The first phase of the project is expected to go on stream in 2012-13.
Both JSW Steel and MISI have cooperated in areas of mutual interest earlier and this partnership will be further strengthened through the formation of the joint venture.
''Today when you want to move into high-end, value-added products, the end customers, particularly in the auto segment, look for material that can be used directly, which requires processing in large quantities through service centres,'' said joint managing director and group chief financial officer Seshagiri Rao.
''Marubeni-Itochu has over 100 processing centres across the world and specialises in value-added steel,'' he added.