JSW Building Systems Ltd, a wholly owned subsidiary of JSW Steel Ltd, on Monday said it has formed a 50:50 joint venture with the UK-based Severfield Reeve Structures to create a steelwork business based in Bellary district of Karnataka. Severfield Reeve Structures, a wholly owned subsidiary of Severfield-Rowen Plc, the UK and European market leader in structural steelwork has an annual group turnover of 350 million pounds.
The JV company will be called JSW Severfield Structures Ltd and will build a plant in JSW?s Vijaynagar steel plant complex. The project will have an initial capacity of 35,000 tonne per annum with an initial investment of Rs 220 crore to make steel structures used for airports, malls and stadiums.
The turnover at full capacity will be over Rs 400 crore. ?The JV is expected to earn revenues by 2011 onwards,? said Anshul Singhal, CEO of JSW Building Systems Ltd. The project will be funded through a mix of two-third of debt and one-third of equity. ?Equity investment in the project will be around Rs 73 crore and the balance Rs 147 crore will be financed through debt,? said Jayant Acharya, president-sales and marketing, JSW Steel Ltd. The JV business will use steel plates, galvanised products from JSW, whereas Severfield will provide expertise. ?Over a period of time, we are looking at expanding this facility in Delhi, Mumbai and the East,? said Sajjan Jindal, vice chairman and MD of JSW Steel.
According to Pawan Burde, an analyst with Angel Broking, this is a positive development for the company in the long run as it will be a value addition of its products in-house.