Steel firm makes £30m India deal

The company made structures for Heathrow's new terminal building

A Yorkshire steel firm is expanding in to India by creating a £30m structural steelwork business in the country.

Severfield-Rowen has agreed to create the new company in Bellary and Mumbai with Indian firm JSW Building Systems.

The new firm, called JSW Severfield Structures, will design, make and build steelwork projects in Indian markets.

Severfield-Rowan, based at Thirsk, North Yorkshire, has made structures for Heathrow Airport's Terminal 5 and Wimbledon.

JSW Building Systems is a subsidiary of JSW Steel Ltd of India, the country's third-largest steel company.

'Good shape'

The total investment cost of the 50/50 joint venture will be about £30m to be funded by two thirds debt and the remainder by equity.

Initial revenues from the new businesses are expected in 2011.

Severfield-Rowan said it was "delighted to be establishing a business in India with a partner such as JSW Steel, and is confident that it will provide the group with a platform for significant growth in an area with large and growing infrastructure and construction markets".

He added: "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.

"In support of the company's export ambitions, a new branch office will be opened in Abu Dhabi early in 2009.

"The company is confident it will produce good relative results beyond 2008."