Japan’s JFE Steel Corporation will invest in a joint venture (JV) with India’s JSW Steel Limited to operate the steel business of Bhushan Power and Steel Limited (BSPL), a company acquired by the latter through bankruptcy resolution process, according to a statement by the Japanese company on Wednesday, December 3.
JFE Steel Corporation will invest an estimated $1.75 billion to pick up a 50 percent stake in the JV - JSW Kalinga Steel Limited - which will run the steelmaking assets of BPSL, the statement said.
The JV plans to expand the crude steel production capacity of BSPL to 10 million mt per year by 2030 from the current capacity of 4.5 million mt per year, at its mill located in the eastern state of Odisha.
BPSL owns an iron ore mine and integrated steelworks in eastern India, with a crude steel production capacity of 4.5 million mt per year. It produces steel coils and sheets, bars, and wire rods.
“By bringing JFE’s technological strengths to and combining them with JSW’s operational excellence, the companies will be able to expand the production of high value-added products and improve productivity," the statement issued by JFE Steel Corporation said.
JSW Steel Limited had acquired BPSL in 2019 for an estimated $2.19 billion through the Insolvency and Bankruptcy Code and invested a further $501 million as capital expenditure for growth and maintenance of the company.
“We have engaged, including capital participation, the 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 sheet. 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 contribution to the development of the Indian steel industry,” JFE Steel Corporation president Masayuki Hirose said.
“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,” JSW Steel Limited joint managing director Jayant Acharya said.
The transaction is subject to approvals from regulators including the Competition Commission of India.