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UK steel major forms JV in India
London, Nov 19: British structural steel major Severfield-Rowen has entered into a joint venture with a subsidiary of India's O P Jindal Group and hopes that growth in India will help offset the economic downturn in the UK market.
Based in Thirsk, north Yorkshire, Severfield-Rowen has signed a formal agreement with JSW Steel to create a structural steel joint venture based in Bellary and Mumbai.
JSW Steel, which is part of the O P Jindal Group, is reported to have a capacity of about five million tonnes and plans to expand to 32 million tonnes by 2020. It is based in Mumbai and it also operates in the US, UK, Mozambique and Chile.
The new company, which will be called JSW Severfield Structures, will be based next to JSW Steel's Vijayanagar works in the Bellary district of Karnataka. It will design, make and build structural steelwork projects in Indian markets
The total investment cost of the 50/50 joint venture is about 30 million pounds and will be funded through a mixture of two-thirds debt and one-third equity. The debt element will be raised from Indian and the UK banks and the joint venture expects to start generating profit in 2011.
Chief executive Tom Haughey told reporters: "We have identified India as a place with a very strong growth potential."
He added that the joint venture would work on everything from oil and gas projects to stadiums.
Severfield-Rowen has worked on numerous high-profile projects including Arsenal's Emirates Stadium. It is currently providing structural steel for a closing roof for Wimbledon's Centre Court.
The company is the only structural steel contractor for the London 2012 Olympic Stadium.
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