Calcutta, Aug. 17: After Korea’s Posco and Luxembourg-based ArcelorMittal, it is now the turn of Baosteel, China’s largest steel company, to bite the India bait.

The company today signed a joint venture agreement in Shanghai with Calcutta-based Visa Steel to set up a 100,000-tonne ferro chrome plant in Orissa, making a beachhead in what is estimated to become the second-largest steel market within a decade.

The joint venture company — Visa Bao —will be a subsidiary of Visa Steel, which will hold a 51 per cent stake, while Baosteel Trading Co Ltd will own 35 per cent.

Visa Comtrade AG, Switzerland, the trading and logistics arm of the Visa Group, will hold the remaining 14 per cent.

Vishal Agarwal, managing director of Visa Steel, said the Baosteel JV would start production by the middle of 2009.

Visa Steel is also setting up an integrated stainless steel plant at Kalinganagar in Orissa.

“The new plant will be close to our upcoming facility. We will seek more land. However, if this takes long, we may set up the unit within the existing area,” Agarwal, who signed the deal on behalf of Visa, said from Shanghai.

The new project will entail an investment of Rs 260 crore, to be financed through a debt-equity mix of 65:35.

The JV marks the beginning of a significant relationship between Baosteel and Visa Steel, which is one of the top suppliers of chrome ore and chrome ore concentrate to China, the largest steel producing country in the world.

Baosteel is one of the long-standing customers of Visa Comtrade. The Chinese company has promised to pick up 70 per cent of the production. The rest will be sold in the local market and part will be exported.

Agarwal said chrome ore for the new plant would come from the Orissa Mining Corporation. Industry observers believe that the ferro chrome plant could be the precursor to a further collaboration, including a steel plant in the future.