Tata Steel in joint venture with Australian major

Rs 900 cr manufacturing facility at Jamshedpur.

Tata Steel today announced formation of an equal joint venture with the Australian major BlueScope Steel to foray into the business of zinc and aluminium metallic coated steel, painted steel and rollformed steel products in India and South East Asia. The proposed venture will also deliver pre-engineered buildings (PEBs) and other building solutions.

The joint venture company will set up a manufacturing facility at Jamshedpur in Jharkhand near the Tata company's main production unit with an investment of Rs 900 crore.

The facility will have an annual metallic coating capacity of 250,000 tonne and paint line capacity of 150,000 tonne. Both the companies will contribute equally towards the capital investment.

Proposed to be headquartered at Pune, the joint venture company will also assume ownership of the development of the three rollforming and PEB manufacturing facilities of BlueScope Steel at Pune, Chennai and New Delhi.

BlueScope had announced the development of the three new manufacturing facilities with an investment of Rs 340 crore in December 2004. In addition, it will assume ownership of BlueScope Steel's Lysaght rollforming business in Sri Lanka, which has been in operation since 1994.

The ground-breaking ceremony of the Jamshedpur plant, which is likely to be operational in 2008, will be held in Jamshedpur on November 16, in the presence of the state Chief Minister.

The joint venture will offer a range of branded steel products for building and construction applications, including Zincalume and Colorbond coated steels; Lysaght rollformed products and Butler PEBs.

Tata Steel Managing Director B Muthuraman said in a press release: "Tata Steel and BlueScope Steel share a similar approach to value creation in the steel business. Consumers would benefit from the range of solutions that will now be available to the buildings industry. This JV combines the strengths of the two organizations and would increase the use of value added steel products." release added the investment was consistent with the company's strategy of growing downstream value-added business in Asia.

BlueScope Steel Managing Director & CEO Kirby Adams said: "Together, BlueScope Steel and Tata Steel have forged a powerful partnership, which will capitalise on the strengths of our two organisations in steel production and in bringing to market premium quality branded products. Both companies see the value in implementing this coated steel development strategy across South and North Asia."

BlueScope Steel is an international flat steel solutions company, with manufacturing and marketing presence in Australia, New Zealand, Asia and North America. It operates a 5.1 million tonne per annum integrated plant in Australia, a 650,000 tonne per annum facility in New Zealand, and has a 50 per cent interest in a 1.8 million tonne mini-mill in Delta, Ohio. Steel rolling, coating and painting plants are located in Australia, New Zealand,

Thailand, Malaysia and Indonesia. Some plants are under construction in China, Vietnam and India. It has a network of more than 50 rollforming facilities in 13 countries.

Tata Steel had last year invested in NatSteel Asia which has a capacity to manufacture two million tonne of steel products per annum through its facilities in six countries in South-east Asia and China.

Tata Steel owns iron-ore mines, collieries and chromite mines located near its plant. It is now undergoing an expansion at its Jamshedpur plant of 1.8 million-tonne per annum and plans to expand this facility to 10 million tonne by 2010.

It has also announced plans for three greenfield steel plants totalling 23 million tonne per annum capacity in Eastern India. It also plans to set up a six mtpa steel product capacity in Iran and is exploring opportunities in Bangladesh.