Business

JSW Steel to establish greenfield unit in Georgia

— PHOTO: PAUL NORONHA

GOING PLACES: S. K. Gupta (left), Director and Chairman, wih Seshagiri Rao, Director, Finance, JSW Steel, addressing the company’s annual meeting in Mumbai on Monday.

MUMBAI: JSW Steel on Monday said it had formed a 49:51 joint venture with U.K.-based trader to put up a greenfield facility to produce long products in the Republic of Georgia, entailing an investment of $42 million.

Declined to disclose the identity of the joint venture partner, JSW Steel’s Director (Finance) M. V. S. Seshagiri Rao said the company would have an initial production capacity of 1.75 lakh tonnes and the plant would be commissioned in the current fiscal.

JSW Steel will invest in the joint venture a little below $7 million, which would be funded through a 2:1-debt-equity mix. “The debt portion has already been tied-up and work on the project started,” Mr. Rao said.

Half of the debt part had been funded by the European Bank for Reconstruction and Development, while the second half had been syndicated, he added.

“Georgia is an exciting place. It consumes half-a-million tonne steel a year and is entirely dependent on imports. However, it exports scrap, but does not make finished steel,” he said. According to Mr. Rao, Georgia is also a good source for cheap hydro power and, thus, along with local availability of scrap, steel making will be economical.

He also said JSW Steel would invest Rs. 14,000 crore by 2010 to jack up its steel making capacity to 11 million tonnes a year from 4.8 million tonnes now. — PTI

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