Toshiba-JSW Venture to Begin Production in 2011 and Aims for $400 Million Turnover by 2015

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Japanese manufacturer Toshiba Corporation (TYO:6502) (Tokyo, Japan) and Indian business conglomerate JSW Group (Mumbai) are proposing to begin initial production in 2011 at their 75:25 joint venture manufacturing facility for supercritical steam turbine and generators sets, aiming for a turnover of $400 million by 2015. Over the next five years, the two firms will invest $160 million in their upcoming facility at Ennore, which is near Chennai in the southern Indian state of Tamil Nadu.

Production of turbine generator components such as blades, casting and nozzle diaphragms is expected to begin in 2011, with the manufacture of full-steam turbine and power generation sets scheduled to begin in 2012. The joint venture aims to achieve a production capacity of 3,000 megawatts (MW) by 2014. Toshiba's power equipment manufacturing facility at Yokohama, Keihin Operations, will provide support to the venture in augmenting its manufacturing capacity.

The joint venture, Toshiba JSW Turbine and Generator Private Limited, was incorporated in September 2008 after the partners signed an agreement in May that year to market and manufacture supercritical steam turbine and generator sets, with capacities in the range of 500 to 1,000 MW, for thermal power plants in India. Toshiba holds a 75% stake, while JSW Energy Limited (Bangalore, Karnataka) and JSW Steel Limited (BSE:500228) (Mumbai) hold stakes of 20% and 5%, respectively.

The manufacturing facility will be developed over 400,000 square meters of land, about 18 kilometers north of central Chennai. About 20% of the initial workforce employed at the plant will consist of locals, and this number is slated to increase to 50% by 2012. The joint venture is expected to employ about 500 people by 2014. Toshiba plans to train 80 new Indian hires in Japan under a scholarship program aimed at imparting essential knowhow in manufacturing skills and shop-floor leadership to the trainees.

The joint venture would give preference to procurement of parts and materials from domestic manufacturers, subject to international quality standards being met, and consider steel imports from Japan or Europe as a secondary option. The venture also will give preference to the power projects of JSW Group in terms of supply of units as well as price.

Toshiba brings three major technologies to the joint venture: supercritical, super large-sized fabrication, and super-precision machining. By partnering with a local company, Toshiba expects to tap into the burgeoning market of the Indian power sector. In fact, according to Atsuhiko Izumi, the executive vice president of Toshiba, the joint venture is likely to secure its first order for supplies by the end of this year.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project spending opportunity databases, market forecasts, high resolution maps, and daily industry news.