July 25, 2008

JSW to ink 25:75 JV with Toshiba for critical steam turbine units

JSW Group has announced that it will form a 25:75 JV with Japanese major Toshiba to manufacture and market super critical steam turbines and generators for thermal power plants in India. The JV, expected to be formed in June 2008 with an initial capital of INR 200 crore, will invest nearly INR 1,000 crore.

Of the JSW group’s 25%, JSW Steel will hold a 5% stake while JSW Energy will control 20% stake.

The scope of the JV included designing, manufacturing, marketing and maintaining medium and large steam turbines and generators, ranging from 500 MW to 1,000 MW. These turbines will be deployed in thermal power plants.

Mr SS Rao joint MD & CEO of JSW Energy said that "This alliance is aimed at giving us an advantage in the Indian energy sector. The JV is aimed at responding to expanding electricity demand in tandem with India’s economic growth."

Mr Atsuhiko Izumi executive VP of Toshiba’s Power Systems Company said that "This is a significant step for Toshiba, one that will give us a firm foothold in the Indian market for thermal power generation."

The JV partners are now seeking a site of some 400,000 square meters on which the facilities will be developed. Toshiba’s power equipment production facility in Yokohama Keihin Operations will complement the JV’s effort to ramp up the manufacturing process in the beginning, as the JV aims to establish an independent production scale of 3,000 MW a year.

Driven by strong economic growth, the Indian power generation equipment market is expected to see demand growth of 15,000 MW to 16,000 MW per year for the next decade. Coal fired thermal power stations will account over 60% of the capacity growth, far surpassing other energy sources.