Welspun Maxsteel buy to help JSW Steel to achieve its 40 MTPA goal

The Sajjan Jindal-led JSW Steel, the country’s third largest maker of the product, has entered into a definitive agreement with Welspun Enterprise to acquire all of Welspun Maxsteel for Rs 1,000 crore. The move is likely to help JSW Steel in achieving its goal of having 40 million tonnes a year capacity from the present 14.3 million TPA.
 
Welspun Maxsteel is situtated in close proximity (ie, about 40 km) to JSW Steel's Dolvi unit, offering complementary infrastructure and location to augment the current envisaged expansions at Dolvi.
 
Welspun Maxsteel has an installed capacity of 900,000 tonnes yearly, a DRI or sponge iron unit which is gas-based, along with a captive jetty and a captive railway siding. For supply of gas to the sponge iron plant, Welspun has an agreement with Gail and is sourcing its lumps and pellets for the sponge iron unit through NMDC and via imports, respectively.
 
JSW is expanding its capacity at Dolvi from 3.3 million to five million tonnes. JSW Steel is planning to utilise Welspun Maxsteel’s pellets for its Dolvi plant in Maharashtra, which will bring down the cost of production substantially. While initially the DRI produced by Welspun Maxsteel will be used partly by JSW Steel's Dolvi unit, it would be consumed entirely post completion of its ongoing expansion to 5 MTPA.