JFE Steel and JSW Steel have agreed to transfer Bhushan Power & Steel Limited (BPSL) to a 50:50 joint venture between the two.
The facility in Odisha, India, is an integrated steelworks with a production capacity of 4.5Mt/year, but the joint venture plans to increase capacity to 10Mt/year by 2030.
CEO of JSW, Jayant Acharya, said: “We are delighted to announce this strategic joint venture with JFE Steel for our steel business in BPSL. JFE has been a trusted partner for JSW Steel since 2009, and the relationship has strengthened over the years as both companies have collaborated on numerous initiatives.
“Today’s announcement brings together JSW’s expertise in India with JFE’s technological strengths, and will enable the joint venture to realise its growth potential and produce a variety of value-added steels.”
As part of the agreement, JFE will invest JPY 270 billion (~$17.4m) into the facility’s new joint venture, which was previously owned by JSW Steel and JSW Shipping & Logistics.
By operating on an existing steelworks, the joint venture expects to be able to quickly meet steel demand in the rapidly growing Indian market. Furthermore, by positioning the joint venture as its third integrated steelworks, JFE hope to expand earnings from its overseas business.
JFE President and CEO, Masayuki Hirose, added: “Since we signed the strategic comprehensive alliance agreement with JSW in 2009, we have engaged in various collaborations and partnerships, including capital participation; licensing of manufacturing technology for automotive steel and non-oriented electrical steel sheets; and a joint venture for the manufacturing of grain-oriented electrical steel sheets.
“Our relationship is now entering a new phase. I am confident that by leveraging our technological strengths and jointly operating an integrated steel plant in India with JSW, we will not only contribute to the further growth of both companies but also make a significant contribution to the development of the Indian steel industry.”
BPSL was established in 1970 and has the capabilities to produce hot- and cold-rolled coils and sheets, as well as bars, wire rods, and steel pipes.
