Mahindra Ugine Steel Company Ltd (MUSCO) has formed a new joint venture company, Mahindra Sanyo Special Steel Private Ltd, following the financial closure of its joint venture.
The company has completed the financial closure of the 51:49 joint venture with Sanyo Special Steel Co Ltd and Mitsui & Co Ltd.
Profitable venture
“This new venture will help the company emerge as one of the most profitable, high quality speciality steel producers in the coming years,” said Anand Mahindra, Chairman and Managing Director, Mahindra Group.
MUSCO had approved the slump sale of its steel business into its 100 per cent owned subsidiary Navyug Special Steel Private Ltd (Navyug Steel) in November last year.
Sanyo has infused about Rs 129 crore for its 29 per cent stake, while Mitsui paid about Rs 89 crore for its 20 per cent stake in Navyug Steel, the joint venture company. MUSCO holds the balance 51 per cent of equity in the joint venture.
With financial, technical and operational inputs from Sanyo Special Steel and Mitsui, the joint venture expects to enhance its current production from the existing level of 120,000 tonnes a year.
Value chain
“Over the last 18 months working with Mitsui and Sanyo, we have developed a common vision of the future of our joint venture that leverages the strengths of all three partners. It gives us the opportunity to move up the value chain while addressing the growing needs of the Indian market for speciality steels,” said Hemant Luthra, Chairman, Mahindra Sanyo Special Steel.