Australian giant plans venture with Tisco

Plans $100 million investment in India.

BlueScope Steel, a leading steel producer in Australia and New Zealand, has decided to invest AU$100 million for setting up manufacturing facilities in India, and is exploring the possibility of forming a joint venture with Tata Steel.

Announcing the company's decision to set up three manufacturing facilities in Pune, Chennai and New Delhi, BlueScope Steel CEO and Managing Director Kirby Adams said his company was currently engaged in a feasibility study with Tata Steel, and was exploring the possibility of forming a 50:50 joint venture to develop a metal coating and painting facility in India. The study was expected to be concluded by May, 2005.

The announcement on the company's website further added: "The discussions with Tata Steel are proceeding on the basis that, should a decision be made to commence construction of a coating and painting facility, the new investments being announced today would form part of that 50:50 joint venture."

Tata Steel sources confirmed the development and said talks were on. The Australian steel major also plans to establish a network of 18 new sales offices at locations around India, with sales planned to commence in 2006. It currently operates 75 manufacturing plants across 16 countries, including 12 in Asia and the Pacific.

The facility in Pune serving the burgeoning western region is expected to be commissioned in 18-24 months' time.

The Pune facility would incorporate a BUTLER manufacturing facility for pre-engineered buildings and a design centre which would engineer and design creative, cost-effective and aesthetically pleasing buildings for the Indian market.

The rollforming facilities in Chennai and New Delhi would offer a full range of LYSAGHT products and would serve India's growth territories in the south and north, respectively.

The main idea was to focus on developing new markets and new applications for coated steels in the Indian construction market.

BlueScope was looking at applying the reverse integration approached, deployed in other parts of Asia, whereby initial investments in rollforming capacity led to further investments in a steel coating and painting operation, once demand for the products was established.