JSW Steel plans to set up a 0.6 million tonnes per annum electrical steel manufacturing facility at its existing Vijayanagar plant in Karnataka. The company has joined hands with JFE Steel of Japan for the technology know-how.
JSW Steel has steel production capacity of 10 mtpa at Vijayanagar. In 2010, both JSW and JFE entered into an agreement to collaborate in automotive steel manufacturing at Vijayanagar works. They now intend to extend their collaboration to electrical steel. JFE holds about 15 per cent stake in JSW steel.
The first phase of the facility to produce 0.2 mtpa cold rolled non-grain oriented electrical steel will be commissioned in 24 months from the date of receiving the requisite approvals, JSW Steel said in a press release on Monday.
The company did not provide details on investment in the project.
Due to the technological constraints involved in the production of electrical steel, the market is significantly dependant on imports. In India it is produced by Steel Authority of India and Thyssenkrupp Electrical Steel.
The current demand for electrical steel is about 0.5 mtpa and expected to double by 2016-17. It is growing at a CAGR (compound annual growth rate) of 15 per cent, said JSW officials.
The major consuming sectors for this product are power, capital goods, consumer durables and motor producers for the automobile sector. The Steel and Power Ministries are encouraging domestic steel makers to consider investment in electrical steel.
JSW PROMOTERS RAISE STAKE
The promoter group of JSW Steel has increased its stake in the company by 3.59 per cent to 41.3 per cent. JSW Investments, a promoter group company, acquired additional shares worth Rs 11.04 crore in the open market in two tranches last week, JSW Steel said in a filing.
The promoter group entity bought 147,500 shares on March 7 and another 9,500 shares on March 9. These purchases were made through the National Stock Exchange.
The holding of JSW Investments in JSW Steel has increased to 3.59 per cent from 2.94 per cent after this acquisition.
The company's shares have been under pressure in last few months due to rising raw material cost, lower demand for steel and high debt.
The ban on iron ore mining in Karnataka has pushed up raw material cost of the company. It touched a 52-week low of Rs 464 in December.
Shares of JSW Steel were up 2.27 per cent at Rs 764 on Monday.