JSW Steel Ltd, at the company?s 14 annual general meeting (AGM) on Monday, announced its plan to set up a steel plant in Georgia, for which it has entered into a joint venture with a UK-based trader for setting up a steel plant with an initial capacity of 1,75,000 tonne per annum of TMT bars.
The company proposes to invest to the extent of 49% of equity of Geo Steel LLC, a company incorporated under the laws of Georgia which is setting up a steel rolling mill facility there.
The estimated project cost of $42 million is proposed to be financed by way of debt of $28 million and the balance through equity of $14 million, of which up to 49% that is, $6.86 million will be invested by JSW Steel Ltd.
Talking on the side lines of the AGM, Seshagiri Rao MVS, director finance of the company said, ?We will be producing steel at a very competitive cost. The power cost in Georgia is very cheap as hydro-based power is being used there. Moreover, there is huge local demand for the product as well.?
The opportunity is identified by the company for catering to the growing needs of the construction industry in Eastern Europe countries mainly in Georgia, Armenia, Azerbaijan, Russia and former CIS countries. JSW Steel?s shares on Monday were up 5.10% or Rs 48.25 to close at Rs 994.85 on the Bombay Stock Exchange.
The company in the last 18 months invested about Rs 10,500 crore on acquisition and expansion projects. By 2010 it will invest another Rs 14,000 crore in various projects, it said.
The company has reported a growth of 34% in its net profit to Rs 1,728 crore and an increase of 33% in its net turnover to Rs 11,420 crore for the year ended March 31, 2008.
