Indian steel major JSW Steel Thursday announced an agreement with Japan's second largest steelmaker JFE Holdings to set up a greenfield project in West Bengal and an automotive steel manufacturing unit in the country.
"JFE and JSW will collaborate on a planned plant in West Bengal," said JSW Steel managing director Sajjan Jindal.
"We are discussing ways and means through which JSW and JFE can collaborate in our upcoming project in West Bengal. We are interested in partnering each other to take forward the proposed steel project at Salboni," Jindal said at a media briefing in Mumbai Thursday.
JSW Bengal Steel, a joint venture between JSW Steel and the state government, is setting up the West Bengal project.
The company is constructing a 10-million-tonne steel plant in the state at an investment of Rs.35,000 crore (about $7 billion) in Salboni.
"According to the pact with JFE, we will collaborate with the company in 10 fields, one of which is our Bengal project," Biswadip Gupta, joint managing director and chief executive officer of JSW Bengal, told IANS in Kolkata.
JSW Steel has formed two core committees, which will make agreements for each of these 10 fields where the two companies will collaborate, he said.
"They will make agreement for Salboni project also," Gupta said, adding that no time frame had been fixed for the agreements.
The two companies will also cooperate in manufacturing automotive steel.
Added Hajime Bada, JFE steel president and chief executive: "JFE, with this agreement, is determined to intensify its relationship with JSW to serve the request of its automotive customers."
"This agreement shall also provide JFE an avenue to look into the future possibilities of development in India," Bada said in a statement.
According to a source close to the company, JFE has agreed to acquire 10 percent stake in JSW Steel for 50 billion yen ($561 million) which the Indian Steel major will spend on greenfield projects.
JSW has plans to expand its annual capacity to 32 million tonnes by 2020 by setting up greenfield projects in Jharkhand and West Bengal.