JSW Steel forays into electric steel manufacturing with Japanese firm

Sajjan Jindal-led JSW Steel on Monday said it is entering the electric steel segment and will set up a facility in collaboration with Japan's JFE Steel in Karnataka.

Electrical Steel is a high grade product and due to the technological constraints involved in its production, the market is largely dependent on imports.

The company plans to set up the 0.6 million tonnes per annum (MTPA) electric steel manufacturing facility at its Vijayanagar plant in Karnataka, the company said in a statement. However, it did not give the details of the investment.

"Initially, this facility shall produce 0.4-0.5 MTPA of Cold Rolled Non-grain Oriented (CRNO) grade electrical steel. The company will also take sight on the production of Cold Rolled Grain Oriented (CRGO) grade in future," JSW said.

It added that production of electric steel will be increased in a phased manner and the company aims to become the largest domestic producer in this category.

"The first phase of the facility shall produce 0.2 million tonnes per annum CRNO and which shall be expected to get commissioned in next 24 months from the date of receiving requisite approvals," said the company, which manufactures a wide range of flat and long steel products.

According to estimates, the present demand of the value-added product is about 0.5 MTPA and it is expected to double by the year, 2016-17.

"The demand of Electrical Steel is expected to grow at a CAGR of 15 per cent. Commensurate with this rise in demand, JSW expects to cater to the growth by scaling its manufacturing facilities," the company said.

JFE, a leading Japanese steel producer, holds about 15 per cent stake in JSW and both the companies also have agreement to collaborate in automotive steel manufacturing.

"JSW aspires to fully equip in order to adhere to the stringent quality standards required Electrical Steel with the support of JFE," the company said.

Shares of the company were trading at Rs 753 a piece on the BSE at 1.30 pm, up 0.75 per cent from the previous close.

- With PTI inputs