JSW Steel plans to raise Bellari plant capacity by 60% to 16 million tonnes

27 Oct 2014


JSW Steel, the flagship company of the $11-billion JSW Group, plans to raise capacity at its Bellary plant by 60 per cent to 16 million tonnes a year, at an estimated investment of Rs30,000 crore, in a move that would create the largest single-location steel facility in India.

The Sajjan Jindal-led JSW Steel, a leading provider of specialised steels in the country, had earlier this month sought the steel ministry's clearance for the project, which has forwarded it to the environment and forest ministry for its approval, sources said.

The capacity addition plan is in line with JSW Steel's overall target of achieving a portfolio of 40 mtpa by 2025, which in turn would help the steel maker to retain its market share of 13-14 per cent.

JSW Steel has 14.3 mtpa installed capacity spread across Karnataka, Maharashtra and Tamil Nadu.

In July this year, Sajjan Jindal, chairman of the company, had announced plans to increase the overall steel capacity to 40 mtpa by 2025, which will entail a capital outlay in the range of $22 billion (Rs1,34,880 crore).

The government also proposes to more than treble the country's steel production capacity to 300 mtpa by 2025, which would involve investment of a whopping $200 billion over the next decade.

It generally takes $1 billion investment to create a one million tonne steel capacity and JSW Steel may have to invest $6 billion or roughly about Rs36,000 crore to crate the additional capacity.

However, industry sources say since the expansion would be brownfield in nature, it might require less for the company, but not less than Rs30,000 crore.

Also, according to the company, ''On the anvil are two 10 million tonne greenfield facilities in West Bengal and Jharkhand.''

JSW Steel has technology tie-ups with global sector leaders such as JFE Steel, Marubeni Itochu Steel, Praxair and Severfield Rowen Plc, which gives the company an edge in technology and products. It also ranks among the lowest-cost steel producers in the world.

Nearly 40 per cent of the company's products are high value steels and JSW Steel plans to take it to 50 per cent. Nearly one fifth of its products are exported, which makes it India's largest exporter of coated products with a presence in over 100 countries.

The company was the largest exporter of steel in the country during the April-September period of the current fiscal, contributing 61 per cent of the total shipments.

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