Visa Steel enters into JV with BAOSTEEL

VISA Steel Ltd on August 17, 2007 has entered into a Joint Venture with Baosteel Trading Co. Ltd., China (Baosteel Trading) and VISA Comtrade AG, Switzerland (VISA Comtrade) for setting up a 100,000 TPA Ferro Chrome plant in Orissa.

The JV Company titled "VISA BAO Ltd" shall be a subsidiary of VISA Steel, which will hold 51% of the shares in the Company. Baosteel trading and VISA Comtrade will hold 35% and 14% shares in VISA BAO Ltd respectively.

The JV Agreement was signed on August 17, 2007 Shanghai by Mr. Vishal Agarwal, Managing Director on behalf of VISA Steel, Mr. Li Qing Yu, President on behalf of Baosteel Trading and Mr. Vivek Agarwal, Executive Director on behalf of VISA Comtrade, in the presence of Mr. Vishambhar Saran, Chairman, VISA Group, Mr. Xu Le Jiang, Chairman, Baosteel Group, Madam Xie, immediate past Chairperson, Baosteel Group and various other senior executives of Baosteel.

The cost of setting up the 100,000 TPA capacity Ferro Chrome plant and related infrastructure is estimated to be around Rs 260 crores, which will be financed through a debf:equity mix of 65:35.

VISA Steel is emerging as one of the largest, low cost integrated special and stainless steel Companies. While the blast furnace and coke oven plant have already been commissioned, VISA Steel is in advanced stages of commissioning its 50,000 TPA Ferro Chrome Plant. VISA Steel also plans to commission its 300,000 TPA Sponge Iron Plant and 50 MW Waste Heat Recovery Power Plant in end of FY 2007-08 and the 0.5 million TPA Special & Stainless Steel Plant including a Bar & Wire Rod Mill and an additional 25 MW Power Plant by end of FY 2008-09.

Baosteel Trading is the designated company in Baosteel Group Corporation (Baosteel) for overseas investment in resource development to support the raw material requirements of Baosteel's plants in China and has the sourcing rights for imports of Ferro Chrome into China for consumption by Baosteel and its affiliates. Baosteel is the largest and most modern steel enterprise in China with a capacity of about 24 million TPA of steel, including stainless steel, for which they have a long-term demand for Ferro Chrome.

VISA Comtrade is the international trading, shipping and logistics arm of the Rs 2,000 crore VISA Group, providing global supply chain solutions for energy products, minerals and metals, Headquartered in Switzerland, VISA Group has a global network of offices including Australia, China, Indonesia, Singapore and UK. VISA Group has had its office in Beijing since 1994 and VISA Comtrade has been active in sourcing coal and coke from China and supplying minerals such as chrome ore / concentrates and iron ore, Ferro Chrome and non-ferrous products to China. Baosteel has been one of the long-standing customers of VISA Comtrade in China.

Commenting on the developments, Mr. Vishambhar Saran, Chairman, VISA Group, said: "This JV takes our relation with Baosteel another step forward and ensures a win-win situation for both companies through a long-term market for the JV company and a stable supply of Ferro Chrome for Baosteel's stainless steel plant in China.

Source : Equity Bulls

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