【Ferro-alloys.com】：Japan’s JFE Steel Corp. is investing 157.5 billion rupees ($1.7 billion) in a joint venture (50:50) with India’s JSW Steel. This is stated in a statement by JFE Steel.

The agreement provides for the transfer to the joint venture of the steel plant of JSW’s subsidiary, Bhushan Power & Steel, in Odisha, with the latter’s equity capital valued at 315 billion rupees.

The deal will be carried out in two equal tranches, with JFE acquiring 25% of the shares in March next year and the remainder in approximately June. The joint venture will become effective after the necessary procedures, such as obtaining approval from the authorities, have been completed.

Bhushan Power & Steel (BPSL) owns a mine and an integrated steel plant in eastern India with a production capacity of 4.5 million tons of steel per year. The company mainly produces flat products, bars, and wire.

The joint venture plans to increase steel production at the integrated steel plant to 10 million tons by 2030. There is also potential for future expansion to 15 million tons.

The joint venture, which will manage the existing integrated steel mill, expects to meet the demand for steel in the rapidly growing Indian market and achieve accelerated profitability. In addition, the companies intend to expand the production of high value-added products and increase productivity.

The new venture expands the existing partnership between JSW Steel and JFE Steel in India, Bloomberg notes. In August this year, the companies announced plans to jointly invest around 58.5 billion rupees in expanding their grain-oriented electrical steel production capacity through their two enterprises. Prior to this, the parties acquired thyssenkrupp Electrical Steel India for 41.6 billion rupees through a joint venture with equal rights.

JFE Steel aims to achieve overseas business profits of 200 billion yen ($1.3 billion) by fiscal 2034/2035, and expects the Indian venture to account for at least a quarter of that amount, JFE Steel Executive Vice President Hiroyuki Ogawa said at a briefing.

JSW acquired BPSL through a debt settlement process. In September this year, the deal was upheld by the Indian Supreme Court, which reversed its previous decision.

• [Editor:Alakay]