Marubeni-Itochu Steel Establishes Magnetic Steel CC JV in India

Marubeni-Itochu Steel, Japanese major steel trading house, announced on Thursday the firm decided investment in a coil center (CC) to process magnetic steel sheet in India. The CC will be jointly operated by Marubeni-Itochu Steel and Gupta Machine Tools (GMT) of India. Total investment for the new CC establishment is US$ 6 million (approximately 500 million yen). The CC will start operation in late 2011 with initial processing capacity at 40,000 tonnes per year, to supply magnetic steel sheet to Precision Stampings, GMT’s subsidiary and the largest magnetic steel sheet processor in India.

Magnetic steel sheet market in India is estimated at 400,000-500,000 tonnes per year. The demand is expected to grow by 20-30% per year when electric power generation, transmission and distribution systems are actively organized or production of transformers and motors is rapidly increasing. The demand is mainly for low grade magnetic steels at present but Marubeni-Itochu Steel forecasts the demand should increase for higher grade products in future. The firm aims to gain and share market information from GMT.

The CC will be constructed with one slitting line in Gujarat State in India where Precision Stampings and the customers are located. The capital fund is US$ 6 million, 80.1% shared by GMT and 19.9% by Marubeni-Itochu Steel. This is the second Indiana CC for Marubeni-Itochu Steel. The existent CC processes automotive steel sheet.

Precision Stampings operates 5 plants in India and the annual revenue is approximately 3.7 billion yen. The firm stamps and assemblies magnetic steel core. Marubeni-Itochu Steel now operates magnetic steel sheet processing sites in Japan and China’s northeastern and eastern areas. The firm aims to establish magnetic steel supply system in India, too.