JSW Steel plans to focus on acquisitions as well as expansion through brown-field and greenfield routes in order to raise its steel-making capacity to 40 million tonnes per annum by 2025.
“The company as a long-term strategy, plans to expand its steel capacity to 40 million tonnes per annum (mtpa) by 2025 by means of brown-field and greenfield expansions and also through acquisitions,” JSW Steel said in communique to the BSE.
“In line with the company’s long-tern growth strategy, the capacity expansion projects including the project at Salem, will be taken up in phases,” it added. JSW Steel now has 14.3 mtpa capacity and its plants are located at Maharashtra, Karnataka and Tamil Nadu. The company has plans to enhance capacity of its Bellary plant in Karnataka by 60 per cent to 16 mtpa.
It is in the process of raising the capacity of its Dolvi unit in Maharashtra to 5 mtpa from 3.3 mtpa now. JSW Steel has sought necessary clearances to increase the capacity of the unit further to 10 mtpa, a company source said. JSW Steel is also planning to raise the capacity of its Salem plant in Tamil Nadu from 1 mtpa now.
The company had been pursuing some acquisitions overseas in recent times, but nothing concrete has happened yet. The steelmaker is also reportedly in talks for a domestic buy-out. The company had, in August, entered into an agreement with Welspun Enterprises to acquire its entire stake in sponge iron maker Welspun Maxsteel in a deal worth more than Rs 1,000 crore.
The capacity raising plan of JSW Steel is in sync with government's plan of more than trebling country's steel-making capacity to 300 mtpa by 2025, requiring a whopping Rs 20,000-crore investment over the next decade. It generally takes Rs 100 crore billion investment to create one million tonne steel capacity.