JSW Steel on Friday inked a pact with Algeria's Cevital to buy its Italian arm Aferpi for around Rs 600 crore, a source in the know of the development said on Friday.

The Sajjan Jindal-owned firm had earlier tried to acquire the second largest plant in Italy in 2014, when it was known as Lucchini. The Algerian conglomerate Cevital however acquired Lucchini and renamed it Acciaierie e Ferriere di Piombino (Aferpi).

"JSW Steel has signed a deal with Algeria's Cevital to buy Italy's second largest steel firm Aferpi for around Rs 600 crore on Friday," the source who did not wish to be quoted said.

According to the source, senior officials of JSW are in Italy and the agreement document was signed at Italy's Ministry of Economic Development.

While JSW Steel refused to comment on the development, an email query sent to Cevital remained unanswered.

The acquisition will help JSW to expand its reach in the specialised steel market, particularly in the automobile sector.

Aferpi makes a wide range of quality and special steel for rails, wire rods and bars for railway, automotive, earthmoving vehicles, energy, fastening, springs and welding.

At present, it is working on projects that involve production of 1 million tonne (MT) of long steel products and revamping of wire rod and bar mills, installation of one electric arc furnace of 1 MT capacity with two continuous casting machines.

Besides, it is working on installation of a new rails- and beams-rolling plant and installation of the second electric arc furnace and the third continuous casting machine.

JSW Steel is planning to increase its manufacturing capacity to 40-45 million tonne by 2030 from the present 18 million tonne.

"If the country builds 300 MT capacity by 2030, we would like to plan accordingly to maintain our 15% share, which will be 40-45 MT," JSW Steel joint managing director & group CFO Seshagiri Rao had said earlier.