The Hindu Business Line : JSW, Toshiba to float joint venture

New venture
Toshiba will hold 75 per cent and JSW Group 25 per cent in the joint venture which is to be set up with an initial capital of $50 million.
The scope of the joint venture includes design, manufacture, marketing and maintenance services of steam turbines and generators.

Our Bureau

Mumbai, May 7 The JSW Group and Toshiba Corporation of Japan have agreed to establish a joint venture company to manufacture and market super-critical steam turbines and generators for thermal power plants in India.

JSW, part of the O.P. Jindal Group, has interests in mining, carbon steel, power, industrial gases, port and infrastructure.

Toshiba is a top producer of steam turbines and generators, with over 1,800 units with a capacity of about 150GW installed in over 40 countries.

Toshiba has a steam turbine and generator manufacturing facility in Yokohama, near Tokyo.

The Indian joint venture will be the company’s second such manufacturing base. In August 2007, it won a contract to supply five large super-critical steam turbines and generators to Tata Power.

The two companies will set up a joint venture company in June with an initial capitalisation of $50 million, of which 75 per cent will be held by the Toshiba Group and 25 per cent by the JSW Group, to be held by JSW Steel Ltd – 5 per cent and JSW Energy Ltd – 20 per cent.

The joint venture partners are yet to decide the location of the headquarters and manufacturing facilities.

The scope of the joint venture includes design, manufacture, marketing and maintenance services of mid to large-sized steam turbines and generators, ranging from 500 MW to 1,000 MW, which will be deployed in highly efficient super-critical thermal power plants. The manufacturing operations are expected to start in September 2009.

Announcing the joint venture, Mr S.S. Rao, Joint Managing Director & CEO, JSW Energy Ltd, said: “This alliance is aimed at giving us an advantage in the Indian energy sector. The joint venture is aimed at responding to expanding electricity demand in tandem with India’s economic growth.”

Firm foothold

“This investment is a significant step for Toshiba, one that will give us a firm foothold in the rapidly growing Indian market for thermal power generation,” said Mr Atsuhiko Izumi, Executive Vice-President of Toshiba’s Power Systems Company.

“Toshiba is already the global leader in the market for super-critical steam turbines and generators, which are now moving into the mainstream of thermal power generation in India. By collaborating with JSW, we want to rapidly build up our presence in a fast growing market and to contribute to securing a stable electricity supply in India,” he said.

Plant and machinery

The joint venture partners are seeking a site of some 400,000 sq.m. to develop the facilities, and expect to invest some $250 million in plant and manufacturing equipment. Keihin Operations, Toshiba’s power equipment production facility in Yokohama, Japan, will complement the venture’s effort to ramp up the manufacturing process in the beginning, as it aims to establish an independent production scale of 3,000 MW a year.

Huge demand

JSW said the Indian power generation equipment market is expected to see demand growth of 15,000-16,000 MW a year for the next decade, according to the Eleventh (2007-2012) and Twelfth (2012-2017) Five-Year National Electricity Plans published by the Government. Coal-fired thermal power stations will account for over 60 per cent of the capacity growth.

Last March, there were reports that Larsen & Toubro was in talks with Toshiba Corporation for setting up a joint venture in India to manufacture power plant equipment.

However, in November 20007, L&T and Mitsubishi Heavy Industries Ltd, Japan, inked a joint venture to set up a manufacturing facility to supply super-critical steam turbine and generator facility in India with a capital outlay of about Rs 880 crore. The product configuration would cater to plant capacities ranging between 500 MW and 1,000 MW. The manufacturing operations were expected to begin in the later part of fiscal 2008-09.

More Stories on : Alliances & Joint Ventures | Electrical Goods | Power

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