Key facts
- JFE Steel and JSW Steel are forming a $3.4 billion joint venture.
- JFE Steel will invest $1.7 billion in the venture.
- The joint venture will acquire Bhushan Power & Steel's steel mill in Odisha.
- Production capacity is planned to increase to 10 million tons by 2030.
- JFE Steel aims for ¥200 billion in overseas business profit by fiscal year 2035.
JFE Steel Corporation and JSW Steel Limited have announced a significant $3.4 billion joint venture, with JFE Steel investing $1.7 billion to acquire a stake in an integrated steel mill in Odisha, India. This strategic partnership aims to capitalize on India's surging demand for steel, driven by infrastructure projects and real estate development.
The newly formed entity will incorporate Bhushan Power & Steel's existing steel mill, which currently has a crude steel production capacity of 4.5 million tons per year. The plan is to expand this capacity to 10 million tons by 2030, with potential for further expansion to 15 million tons in the future, making it one of India's largest integrated steel facilities.
This venture is part of JFE Steel's broader strategy to increase its overseas business profit to ¥200 billion by fiscal year 2035, with the Indian joint venture expected to contribute at least a quarter of this target. The collaboration leverages JFE's technological expertise and JSW's operational strengths to enhance the production of high value-added products and improve productivity.
JSW Steel acquired Bhushan Power & Steel through a debt resolution process, a deal that was upheld by India's Supreme Court. This new venture builds upon existing partnerships between JFE and JSW in India, including previous investments in electrical steel production and acquisitions.
Analysts view the investment as a strategic move for JFE to participate in India's growth story, while JSW benefits from reduced leverage and unlocked growth opportunities.