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JSW Steel Ltd has entered into a joint venture with Tokyo-based Marubeni-Itochu Steel Inc (MISI) to set up a steel processing centre in north India with an investment of Rs 122 crore. The location of the proposed plant was not disclosed.
JSW Steel and Marubeni will own 50 per cent stake each in the joint venture – JSW MI Steel Service Centre Pvt Ltd. Both partners will invest 50 per cent of the capital cost through equity and the rest will be funded through bank debt.
The first phase of the joint venture is expected to come on stream in financial year 2013 with an installed capacity of 1.8 lakh tonnes a year. The joint venture will process flat steel products such as hot rolled, cold rolled and coated products to offer just-in-time solutions for sectors such as automotive, white goods and construction, a company statement said.
The JSW Steel scrip gained 3 per cent to close at Rs 609 in the intraday trade on the BSE on Wednesday.
“The rapid growth of the domestic steel industry offers tremendous opportunity for supply of high-end processed steel and through the JV, we could leverage the global sales networks of service centre operations of MISI and the world class technology products manufactured by JSW,” said Mr Seshagiri Rao, Joint Managing Director and Group Chief Financial Officer.
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