Mumbai: JSW, part of $8 billion O.P. Jindal Group has tied up with Toshiba Corp to make and market steam turbines and generators in India.
The two companies will invest $250 million in the joint venture project, which will begin manufacturing operations in September 2009, the company said in a release.
The new company, which is yet to be named, will have an initial capital of $50 million - 75% to be held by Toshiba and the remainder by two key JSW group companies - JSW Steel and JSW Energy.
JSW Energy, a new entrant in the power trading business, will hold 20% stake in the JV.
“This alliance is aimed at giving us an advantage in the Indian energy sector,” S.S. Rao, joint managing director, JSW Energy was quoted as saying.
“The JV is aimed at responding to expanding electricity demand in tandem with India’s economic growth,” he added.
The JV will design, manufacture, market and maintain services of mid-to-large sized steam turbines and generators from 500 megawatts (MW) to 1,000 MW. It aims to establish an independent production scale of 3,000 MW a year.
“By collaborating with JSW, we want to rapidly build our presence in a fast growing market and to contribute to securing a stable electricity supply in India,” Atsuhiko Izumi, executive vice president of Toshiba said in the statement.
Keihin Operations, Toshiba’s power equipment production facility in Japan, will complement the JV’s efforts to ramp up the manufacturing process in the beginning.
Shares in JSW Steel traded at Rs896, up 1.86% from the previous close while Toshiba’s shares were down 0.56% at 886 yen.