JSW Steel is entering into an equal joint venture with JFE Steel Corporation of Japan to manufacture grain-oriented steel sheets. These sheets find a use in the electrical industry.
According to information, in Vijaynagar, Karnataka, where JSW runs a 12 million-tonne steel plant, the downstream facility will be built. The companies did not disclose the investment, but according to industry benchmarks, capex should be in the range of Rs 5,000 crore.
It may be noted that India imports all of its cold-rolled grain-oriented (CRGO) steel sheet, which is perfect for power transformer cores. The first company to manufacture this specialised steel in India will be this JV. The JV will use hot rolled coil as its raw material, which will be produced in Vijayanagar.
JFE Steel is a strategic investor in JSW Steel, holding a 15 per cent stake in the company. The strategic alliance between the two companies kicked off in 2009.
In May 2021, a memorandum of agreement for a joint feasibility study was signed. Since the study’s completion, JSW Steel and JFE Steel have both agreed in principle to establish a 50:50 JV.
According to a statement from JFE, the electrification of autos, the quest for improved energy efficiency, and the usage of renewable energy are all projected to drive up demand for high-grade electrical steel sheets globally.
Jayant Acharya, joint managing director & CEO of JSW Steel, said, “The JV would further strengthen JSW Steel’s position as India’s leading manufacturer of advanced steel products that lead to reduced CO2 emissions, and create sustainable steel solutions.”