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Business News/ Industry / JSW forms joint venture with Japan’s JFE to produce electric steel by 2027
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JSW forms joint venture with Japan’s JFE to produce electric steel by 2027

The JV company will be named JSW JFE Electrical Steel Private Limited, and will have a manufacturing base in Karnataka and a planned investment of ₹5,500 crore, JSW said on Tuesday.

Electric steel is a type of high-end steel that has been modified to possess magnetic properties, and is used in sectors like electric power and electric vehicles. Photo: ReutersPremium
Electric steel is a type of high-end steel that has been modified to possess magnetic properties, and is used in sectors like electric power and electric vehicles. Photo: Reuters

New Delhi: JSW Steel Ltd has announced the formation of a 50:50 joint venture with Japanese steel manufacturer JFE Steel Corporation to produce grain-oriented electrical steel in India.

The new company will be named JSW JFE Electrical Steel Private Limited. It will have a manufacturing base in Karnataka and a planned investment of 5,500 crore, JSW said in a public disclosure on Tuesday. The groundbreaking ceremony for the partnership took place on 12 February and was attended by the top brass of both companies.

Electric steel is a type of high-end steel that has been modified to possess magnetic properties, and is used in sectors like electric power and electric vehicles. JSW Group also plans to enter the electric vehicle business and has announced plans to build an EV ecosystem in Odisha.

The company aims to commence production at the facility by fiscal year 2027, and plans to further expand its capacity to meet the growing market demand for grain-oriented electrical steel in India.

“This collaboration is a milestone development, as it will be the first company to have end-to-end manufacturing of grain-oriented electrical steel products in India. The JV company aspires to cater to the surging domestic demand for grain-oriented electrical steel and contribute significantly to the country's energy infrastructure," the company added in an exchange filing.

JFE Steel Corporation signed a memorandum of understanding (MoU) with JSW Steel Limited in May 2021, to conduct a viability study and to launch a grain-oriented electrical steel sheet-producing and sales joint-venture company in India. The company had planned to complete the feasibility study by 2021 itself and take steps to set up a joint venture company with JSW.

Grain-oriented electrical steel plays a crucial role in the fabrication of various energy-efficient transformers. It can be in laminated, wound, or in punched-sheet form, and serve as the essential core material for distribution transformers, power transformers, and small transformers.

“With the steadily increasing demand for electric power, the growing adoption of renewable energy, and the electrification of automobiles, continued growth is forecast in India and globally for grain-oriented electrical steel sheet [that’s] primarily used in transformers," the company had said in a media statement in 2021.

According to Fortune Business Insights, a market research firm, the global grain-oriented electrical steel market was valued at $11.78 billion in 2022, and is projected to grow from $12.47 billion in 2023 to $18.81 billion by 2030 at a compound annual growth rate (CAGR) of 6%.

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Published: 13 Feb 2024, 12:09 PM IST
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