JSW Severfield Structures Ltd, the joint venture between JSW Steel and UK’s largest steel fabricating company Severfield, will start commercial production by July 2010.
JSW Severfield Structures Ltd, the joint venture between JSW Steel and UK’s largest steel fabricating company Severfield, will start commercial production by July 2010, said Anshul Singhal, the president of the JV, on Tuesday.
The plant’s capacity will be 35,000 tonne of fabricated steel, he said on the sidelines of a conference in Mumbai. The facility, located in the Bellary district of Karnataka, is spread over an area of 65 acres. Singhal said the plant is coming up at JSW Steel’s Vijayanagar plant itself. Fabricated steel is used in the construction of tall buildings, with hotels and shopping malls being its biggest consumers.
JSW Steel, on November 18, had announced that its wholly owned subsidiary, JSW Building Systems Ltd, entered into a 50:50 JV with Severfield Reeve Structures, a wholly owned subsidiary of Severfield-Rowen Plc, to a create a structural steelwork business.
Singhal said that the project cost is pegged at Rs 250 crore. He said, “The cost of equipment, etc, is down and we expect to save some money on that front.” Though he declined to put a number to the cost savings, he said, “This is the best time to put up the fabrication unit as no one else is doing this and we get the equipment, etc, at cheaper rates.”
JSW Severfield is in the final stages of planning and is about to place orders for machinery and other equipment. “All negotiations are complete and soil testing has been done,” Singhal said. He said by July 2010, the first phase of the project would be complete. “The plan is to double production to 70,000 tonnes depending on the market condition and the demand for the product. Currently, we are entering with a very small capacity as the total size of domestic market is about 1 million tonnes of fabricated steel,” he said.
The company expects the market to revive by the time the facility reaches full production. Singhal said JSW Severfield plans to set up units across the country depending upon the demand from different regions.
When the JV was being announced, Sajjan Jindal, vice chairman and managing director, JSW Steel, had said, “We plan to set up four plants in all, starting with Bellary. We have planned one near Delhi, another near Mumbai and the last in the eastern part of India.”
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