The long-term expansion plans of steel major JSW Steel are likely to be affected if its operating margin continues to be under pressure, a top company official said.
"Our vision to produce 32 million tonnes of steel by 2020 may be affected if pressure continues to be on our margins, thereby resulting in a decline in surplus production and growth," JSW Steel Vice Chairman and Managing Director Sajjan Jindal said on the sidelines of the 2nd India Steel Summit here.
Country's third largest steel producer plans to invest a whopping Rs 1,00,000 crore to reach 32 million tonnes of steel production capacity by 2020.
The steel major has proposed two greenfield projects in West Bengal and Jharkhand besides expansion of its present capacity from 5 million tonnes to 8 million tonnes within a couple of months.
The company has been battling shrinking margins due to increase in input costs and subsequent freeze on steel prices since May 7.
Jindal, however, said he does not foresee any major effect of shrinking margins and holding of the price line on the company's short-term expansion plan to reach 11 million tonnes of production by next year.
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"Our plan to reach 11 million tonnes of steel production by next year is on track and the financial dealings for the same have been closed," he said.
JSW Steel's profits for the first quarter declined to Rs 219.35 crore against Rs 468.45 crore in the year-ago period on a net sales of Rs 3,671.49 crore.