JFE Shoji Trade to Launch India Electrical Steel Process Plant

JFE Shoji Trade announced on Wednesday the firm builds wholly owned electrical steel process plant in Pune near Mumbai, India for around 1.3 billion yen. The firm provides high grade electrical steel with lower core loss for local heavy electric machinery makers and other users by establishing the plant in the growing country with expectation for annualized 10% electricity consumption growth. The firm starts the plant in July 2012 targeting annual 20,000 tonnes of sales in 2014.

The plant is Indian first full scale steel processing business for Japanese trading company while Metal One Corporation has interest in automotive steel process plant as joint venture with Suzuki Motor. JFE Shoji Trade tries to expand Indian business through the aggressive investment.

JFE Shoji Trade established the new company, JFE Shoji Steel India with 685 million rupees of capital in January. The firm secured around 42,000 square meters of land in Ranjangaon industry district in Pune, Maharashtra. The firm builds plant with around 6,000 square meters of floor space to process sheet steel with maximum 1.0 millimeters thick and max 1,250 mm width at large and small slitters.

The plant starts operation with 47 employees. The plant plans 5,000 tonnes of sales in 2012 and 20,000 tonnes in 2014. The firm expects grain oriented electrical steel represents around 75% of the sales with around 25% of non-grain oriented grade.

Indian government expects electricity consumption will double in 10 years under strong growth mainly for domestic demand with 1.2 billion of population. With the strong demand, electrical steel demand will increase for transformers and power generation equipment. JFE Shoji Trade already has transaction with Indian local major machinery makers. The firm tries to serve potential transplants of Japanese makers.

JFE Shoji Trade eyes potential cooperation in steel trade with JSW Steel when JFE Steel ties up with JSW Steel in capital participation and automotive steel technology support. The electrical steel oriented new steel process plant will deal carbon steel products.

JFE Shoji Trade has 5 process plants in China, 2 plants in Thailand and plants in Singapore, Taiwan, Malaysia, Indonesia, Philippines, Vietnam and Mexico. The new plant is 15th offshore plant for the company.