MUMBAI: With the demand for specialised electrical steel rising, JSW Steel, which is the largest producer of hot-rolled metal, has further strengthened its existing relationship with the Japanese alloy major JFE Steel Corporation. The companies have announced two more joint ventures which together will invest Rs 5,485 crore to augment the specialised electrical steel capacity to 3.5 lakh tonnes across its Vijayanagar and Nashik facilities.
The investment will be made through the joint ventures JSW JFE Electrical Steel in Vijayanagar in Karnataka, and JSW JFE Electrical Steel in Nashik in Maharashtra.
While the Vijayanagar facility will get Rs 1,545 crore of additional investment from JSW, the JSW Steel-JFE Steel joint venture will invest Rs 4,300 crore in the Nashik facility to ramp up specialised grain-oriented electrical steel (GOES) capacity. Both the capacity augmentations will take its installed output by 3.5 lakh tonnes per annum, the Sajjan Jindal-led company said in a regulatory filing Monday.
The move comes as the nation moves faster towards energy and mobility transition, both of which deploy grain-oriented electrical steel.
“The capacity addition will be for the grain-oriented electrical steel (GOES) through their joint ventures-- JSW JFE Electrical Steel at Vijayanagar in Karnataka, and JSW JFE Electrical Steel Nashik in Maharashtra. The JV partners will expand grain-oriented electrical steel capacity to 350,000 tonne per annum and will jointly invest around Rs 5,845 crore towards this expansion,” the statement added.
GOES is an important material in the production of energy-efficient transformers and large, high-performance generators.
"The national green energy transformation, decarbonisation and digital infrastructure development are triggering large demand for high-grade electrical steel. Our GOES investment is a critical step in enabling import substitution, supporting the nation’s energy transition goals, and delivering high-efficiency electrical steel solutions to the domestic and global markets. This investment with our long-standing partner JFE Steel reaffirms our commitment to building strategic and future-ready steel capabilities that serve both national and global priorities," the company said in the statement.
JSW-JFE Electrical Steel Nashik, formerly known as Thyssenkrupp Electrical Steel India, is one of the first manufacturers of cold-rolled grain-oriented electrical steel (CRGO) in the country with a capacity of 50,000 tonnes per annum located in Nashik.
Earlier this year, in a Rs 4,051-crore deal, JSW Steel and JFE had completed the acquisition of Thyssenkrupp Electrical Steel India. The acquisition provided the company with access to cutting-edge technology thereby aligning with its strategy of enhancing its value-added product portfolio, said JSW Steel.
Considering the increasing domestic demand for CRGO, the board of the company has approved expansion of the above facility from 50,000 tonnes to 2.5 lakh tonnes in a phased manner ending FY28 at an estimated cost of Rs 4,300 crore.
JSW-JFE Electrical Steel had already planned to set up a 62,000 tonnes of CRGO steel at Vijayanagar with an investment of Rs 5,557 crore and is scheduled for commissioning by FY28. This capacity is being enhanced to 1 lakh tonnes now with an additional investment of Rs 1,545 crore.
"This expansion reinforces our commitment to building self-reliance in the domestic specialty steel sector, while also addressing the rapidly growing domestic demand for high-efficiency electrical steel, especially in the renewable energy, energy transition for decarbonization, e-mobility, AI data centers etc," said Jayant Acharya, chief executive of JSW Steel.
This capital investment along with the previously announced investments at Vijayanagar and the acquisition of the Nashik facility will take the overall investments to Rs 15,560 crore, he added.
JSW-JFE Electrical Steel is a 50:50 joint venture between JSW Steel and JFE Steel in Vijayanagar, and had planned to set up a 62,000-tonne CRGO manufacturing facility with a planned investment of Rs 5,557 crore. This is being enhanced to 1 lakh tonnes with an additional investment of Rs 1,545 crore.
The equity funding for the project is expected to be Rs 1,966 crore, which will be funded equally by JSW Steel and JFE Steel.
Upon completion of the capacity additions, the overall CRGO capacity will increase to 350,000 tonnes per annum by FY28.