The facility will be set up over 10 acres of land in the MIDC Chakan Industrial Area, Phase II, at a projected cost of $24 million. Mahindra says the centre will have a processing capacity of 130,000 tonnes when it begins operations in the fourth quarter of the 2015 financial year.
Mahindra – which owns and operates India’s largest network of steel service centres across the automotive, power and appliances sectors – will hold a 51 per cent share in the joint venture, with China Steel and Mitsui holding 24.5 per cent each. The deal marks Mahindra’s second collaboration with Mitsui in recent years, following the pair’s 2011 agreement with Sanyo Special Steel to establish a joint venture for the manufacturing and sale of special steel in India.
Speaking of the current deal (which was announced in November) Harsh Kumar, managing director of Mahindra Intertrade, said: “This state-of-the-art facility will be one of the few merchant producers of steel blanks and profiles offering the full range of services from sourcing to customised JIT delivery solutions. Once operational, it will redefine the supply chain model in the region backed by two global leaders in this field, China Steel and Mitsui.”
China Steel planning and administration division vice-president Julian Shir added: "India is one of the key markets for CSC Group. By establishing this steel processing centre with Mahindra Intertrade and Mitsui & Co, China Steel wishes to extend its services to India and build a beachhead in the Indian automotive market.”
Khaitan’s Vaishali Sharma led the firm in advising Mahindra on the transaction, including the drafting and finalising of the documents and the competition law aspects of the deal.