Severfield-Rowen in Indian expansion
STRUCTURAL steel group Severfield-Rowen today announced the launch of a joint venture with India’s third largest steel company and the opening of a new office in Abu Dhabi.
The North Yorkshire group has teamed up with JSW Steel, part of the $8bn Mumbai-based OP Jindal Group, in a 50-50 partnership in JSW Severfield Structures to be based next to JSW Steel’s Vijayanagar works in Bellary District, 220 miles south of Bangalore and 390 miles south-east of Mumbai.
The business, which is being launched with a £30m investment of equity and two-thirds of debt from UK and Indian banks, will be involved in the design, fabrication and erection of structural steelwork for the Indian market.
The new business is expected to deliver initial revenues in 2011.
OP Jindal Group currently has a capacity of 5m tonnes of steel a year and plans to expand to 32m tonnes by 2020. It is headquartered in Mumbai and has a presence in United States, United Kingdom, Mozambique and Chile.
Severfield-Rowen announced the move as it said its current trading is in line with management expectations thanks to growing orders for work from power stations and the health and education sectors with its order book standing at £414m, representing 12 months work.
It said that it has a strong balance sheet and is in “good shape” for the future it has decided to “adopt a prudent dividend policy designed to support a more sustainable dividend across the economic cycle, whilst also delivering a progressive dividend during periods of growth”.
It will maintain its total dividend at 20p for 2008, the same as last year.
In its interim management statement, the company said: “The UK economic conditions are expected to be difficult in 2009, particularly for some sectors of the construction market. The Company remains in good shape with a significant order book, a competitive cost base and increasing export capability.”
It said the new branch office will open in Abu Dhabi early next year.
Severfield-Rowen is providing the structural steel for a distribution centre for Tesco at Teesport, work on Terminal 2B for BAA at Heathrow Airport, and a new rehearsal studio for the BBC in Cardiff.
It also worked on Terminal 5 at Heathrow.
