Vardhman Special Steels, Japan’s Aichi Steel to set up $284 mn green steel plant in Punjab

Vardhiman Special Steels Limited (VSSL) signed an agreement for collaboration with Japan’s Aichi Steel Corporation (ASC) in establishing a special steel manufacturing center in Punjab with an investment of $284 million (₹2,370 crore), an enormous boost to special steel capacity and to green steel production in India.

The plant is expected to be set up in Ludhiana with an annual capacity of 500,000 metric tonnes, mainly to supply steel to the automotive sector for domestic manufacturers and the global export market.

Focus on green steel
The facility would be developed on EAF-route technology, considered more energy-efficient and eco-friendly compared to the traditional blast furnaces. This process will enable the steel to be produced by melting down scrap metal, thus substantially reducing carbon emissions and fostering circular economy practices.

Our plans alongside India’s net-zero target include establishing a solar power facility to fully cater to the plant’s energy requirements. This complete integration of renewable energy makes this project one of the first in India to commit wholly to the production of “green steel.”

Strategic partnership
Aichi Steel, a member of the Toyota Group and one of the top world producers of special steels, will contribute with advanced technology and expertise in producing high-grade automotive steels. The collaboration is expected to improve product quality and energy efficiency and satisfy the growing worldwide demand for low-carbon steel products.

“With this partnership, we intend to not only increase the country’s special steel capacity but also to set the benchmark for others to follow in terms of sustainable production”, said VSSL in a release.

Strengthening India’s steel sector
This investment is in line with the Indian government’s intent to establish the country as a green steel production capital, especially in high-grade segments such as automotive. Special steels are very important in the production of engine components, transmission systems, and safety parts of vehicles.

With a combination of renewables, recycling of scrap, and the Japanese spirit, the Ludhiana facility is strategically placed to play a pivotal role in India’s transition towards cleaner and more sustainable steel-making.