JSW Steel on Monday said that it had reached an in-principle agreement to establish a 50:50 joint venture (JV) with Japan’s JFE Steel to manufacture cold rolled grain oriented electrical steel (CRGO) in India.
The development takes the MoU signed between the two companies in May 2021 forward. “The feasibility study has since been completed and both, JSW Steel and JFE Steel have in-principle reached an agreement to establish a 50:50 joint venture company. The JV shall be able to manufacture the entire range of CRGO products at its proposed facilities at Vijayanagar, Karnataka, India” JSW Steel said in a statement.
The company also said that the JV would be the first company to produce CRGO products with its entire chain of manufacturing processes in India. Further, it would contribute to the rapidly growing Indian demand, with its “Made in India” CRGO products based on JFE Steel’s energy efficient production technology developed through extensive R&D, it added.
The investment in the project could be significant, according to sources.The finalization of the JV would be subject to execution of definitive agreements and necessary regulatory approvals.
JSW Steel and JFE Steel’s strategic alliance goes back to 2009. The Japanese steel major has a 15 per cent equity stake in JSW Steel.
The companies have a technical collaboration for automotive steel. In 2012, JFE entered into an agreement with JSW Steel to provide technology for the production of non-grain oriented electrical steel products, which has enabled JSW to become India’s leading supplier in this field, JSW said.
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The latest agreement is for CRGO products. Jayant Acharya, Joint Managing Director & CEO, 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 creating sustainable steel solutions.”
JFE’s statement mentioned, the goal of the JV was to contribute to the rapidly growing Indian economy by supplying grain-oriented electrical steel sheet for greener energy network enhancement projects.
The upstream substrate (hot-rolled steel sheet), which is the raw material, would be produced at JSW Steel’s Vijayanagar facility, it also said. The JV is expected to start full operation from 2027.
CRGO exhibits excellent magnetic properties in a single (rolling) direction making it ideal for the iron cores of power transformers, JSW said.
JSW Steel on Monday said that the total consideration for acquiring National Steel and Agro Industries (NSAIL) under the Insolvency and Bankruptcy Code (IBC) was Rs 621 crore.
The resolution plan was submitted by the company’s wholly owned subsidiary, JSW Steel Coated Products Limited (JSWSCPL) and got the National Company Law Tribunal (NCLT) approval on May 19.
In an exchange filing on Monday, JSW Steel mentioned the terms of the resolution plan. JSWSCPL proposes to pay Rs 612.47 crore to the financial creditor.
Further, there would be fund infusion of 8.52 crore towards full and final discharge and settlement of unpaid insolvency resolution process costs, payment towards operational creditors (including workmen and employees) and other mandatory payments in accordance with the terms of the resolution plan.
The filing also mentioned NSAIL shall be delisted pursuant to resolution plan approved by the NCLT, Mumbai Bench without any exit price being paid to the shareholders.
It may be mentioned, NSAIL has diversified interests across industries such as steel, agriculture, and power. It had a turnover of around 815 crore in FY 2021-22.