JSW Cement sees synergy in Monnet Ispat, Bhushan Steel buyout

| Updated on: Jan 15, 2018

Buys will enable sourcing of slag at low cost

With JSW Steel leading the race to acquire the stressed Monnet Ispat and Bhushan Steel assets, it is going to have a rub off effect on its cement business.

The acquisition of Monnet Ispat and Bhushah Steel plants located in Odisha and Chhatisgarh will help JSW Cement source the much-needed slag for cement plant at Odisha and West Bengal at a fraction of cost.

Spearheaded by Parth Jindal, son of Jindal Group Chairman Sajjan Jindal, JSW Cement will soon start commercial production at 1.2 million tonne per annum plant at Jajpur in Odisha with a plan to double it further.

It recently commissioned 2.4 mtpa Salboni in West Bengal and plans to enhance output to 3.6 mtpa with investment of ₹300 crore.

The company's cement plant in West Bengal imports clinker from South-East Asian countries and mixes slag with it to sell high quality cement.

Availability of slag at nearby location is key to convert clinker into cement as it will reduce cost and add up to the bottomline. Slag is a mixture of silica, calcium oxide, magnesium oxide, aluminium and iron oxides.

One tonne of steel production on an average results in 200-400 kg of slag and other materials depending on furnace used in steel making. Monnet Ispat and Bhushan Steel have production capacity of 1.5 mtpa and 5.6 mtpa, respectively.

“There are huge synergies in steel and cement manufacturing not only in terms of production but also while tapping the market. JSW Cement would try to maximise its market share in regions where it has steel plants,” said a market expert.

At present, JSW Cement has manufacturing capacity of 12.5 mtpa largely close to its steel plants at Vijayanagar in Karnataka and Dolvi in Maharashtra except for the standalone plants at Nandyal in Andhra Pradesh and Salboni in West Bengal.

Published on January 15, 2018
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