JSW Steel on May 22 said it has reached an in-principle agreement with JFE Steel to establish a 50:50 joint venture company (JV) to manufacture cold-rolled grain-oriented (CRGO) electrical steel in India.
The agreement comes after a wait of two years. The two companies first entered into a memorandum of understanding (MoU) in May 2021 to conduct a joint feasibility study.
“The feasibility study has since been completed and both JSW Steel and JFE Steel have in‐principle reached an agreement to establish a 50:50 joint venture company. The JV shall be able to manufacture the entire range of CRGO products at its proposed facilities at Vijayanagar, Karnataka, India,” JSW Steel said in a statement.
JSW Steel said the JV will be the first company to produce CRGO products with its entire chain of manufacturing processes in India.
JFE Steel holds a 15 percent equity stake in JSW Steel. In 2012, JFE Steel had entered into an agreement with JSW Steel to provide technology for the production of non-grain-oriented electrical steel products, which has enabled JSW to become India’s leading supplier in this field. The latest agreement extends to cold-rolled grain-oriented electrical steel.
CRGO allows excellent magnetic properties in a single (rolling) direction making it ideal for power transformers while non‐grain-oriented electrical steel exhibits magnetic properties that are largely uniform in all directions, and has applications in iron cores of generators, motors, appliances, etc.
The finalisation of the JV, JSW Steel said, will be subject to the execution of definitive agreements and necessary regulatory approvals.
In an interview with Moneycontrol on May 19, Jayant Acharya, joint managing director and chief executive officer (CEO) for the company said, “This particular technology is a licensed technology and there are very few steel producers which have that. So JFE Steel has the technology and they would be licensing it to us.”
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