JSW Steel has announced its foray in electrical steel, a move that can potentially help India reduce its dependence on imports. JSW's diversification is in line with its plan of manufacturing valueadded steel. In 2010, the steel major entered into a strategic collaboration agreement with JFE, amongst the largest integrated steel producers in Japan.

As the first result of this agreement, the two partners have already announced their collaboration in automotive steel manufacturing at JSW's Vijayanagar works in Karnataka. The foray in electrical steel is a step forward in this collaboration.

JSW Steel has planned to set up an electrical steel manufacturing facility of 0.6 lakh tpa at its integrated Vijaynagar facility. Initially, the unit will annually produce 4-5 lakh tonnes of cold rolled non-grain oriented (CRNO) grade electrical steel. Production of CRGO (cold rolled grain oriented) steel will be taken up later. JSW envisages becoming the largest Electrical Steel producer in the country.

CRGO in India: Quick facts

India is fully dependent on imports for CRGO steel. A big proportion of CRGO steel is used in making power and distribution transformers. India is a victim of scrap CRGO imports, vitiating the quality of transformers. Though India has made plans to make CRGO, on several occasions, none have yet borne fruit. Public sector units RINL, BHEL and SAIL have recently proposed to jointly set up a local manufacturing unit for electrical steel, including CRNO and CRGO. The steel ministry is planning to make it mandatory for electrical steel used in India to bear BIS certification. Bureau of Energy Efficiency has already made it mandatory for distribution transformers to carry a minimum "energy efficiency" rating, implying the use of superior CRGO.

The first phase of the facility, aiming at a production of 2 lakh tonnes of CRNO per year, is expected to get commissioned in 24 months from the date of receiving requisite approvals.

Electrical steel is a high grade product which has seen scant development in India as the technology required is largely inaccessible. Due to the technological constraints involved in the production of electrical steel, the market is significantly dependant on imports (See Box.)

The present demand of electrical steel is about 5 lakh tonnes per year, which is likely to double by FY17. The demand for CRGO grade electrical steel is met purely via the import route while CRNO grade is increasingly dependent on imports as availability from domestic sources remains consistently insufficient. The demand of electrical steel is expected to grow at an annual rate of 15 per cent.

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