Jindal Iron targets 10 m tonne capacity

The Sajjan Jindal-controlled Jindal Iron & Steel Company (Jisco) is targeting a production capacity of 10 million tonne per annum by the end of the decade.

The company is looking at raising capacity through brownfield expansions at its existing plant in Bellary, Karnataka.

Sajjan Jindal, chaiman and managing director, said, "We are looking at a production capacity of 10 million tonne per annum by 2010-11. Capacity additions will be done at our Bellary plant over the years." The company is looking at adding new lines at existing manufacturing facilities, he added.

The company recently announced a 1.5 million tonne capacity expansion plan to take its existing capacity from 2.5 million tonne to 4 million tonne per annum. The project also envisages capacity enhancements in the company's cold-rolling and galvanizing units.

Investments for the proposed expansion are estimated at Rs 2,000 crore.

The company is looking at tying up a debt of around Rs 500-700 crore for the project, while the balance will be generated through internal accruals.

Meanwhile, Jisco is also looking at growth through acquisitions. The company is in advanced stages of negotiations to acquire the 5 lakh tonne per annum Coimbatore-based South India Steel Company (Siscol), promoted by Lakshmi Machine Southern Iron & Works.

"We are planning to announce an acquisition in the next few days. We will be doubling the existing capacity of the steel plant to 1 million tonne after acquisition," Jindal said.

Siscol has a debt burden of Rs 850 crore and is awaiting approval for a corporate debt restructuring scheme. As per the recommendations of the CDR scheme, almost half of the company's debt will be converted into a term loan payable over the next few years.