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JSW Steel expects an additional earning of ₹2,000 crore per annum with enhancement of product mix and some of its cost saving projects that are to be completed by September next year.
The company is setting up an eight million tonne per annum (mtpa) pellet plant and 1.5 mtpa coke oven facility at its Vijayanagar factory in Karnataka to reduce reliance on expensive iron ore lumps and bridge shortage of coke.
Capacity addition
While the pellet plant is expected to be completed by August next year, the coke plant will go on stream in March 2020.
The company is also setting up a 0.3 mtpa colour coated line at Vijayanagar, besides enhancing capacity at Vasind and Tarapur plants.
Seshagiri Rao, Joint Managing Director, JSW Steel, said that with uncertainty on raw material prices increasing every month, the company has been taking all measures to protect the earnings with the focus on high margin products and cost saving measures.
The overall steel making capacity is also being increased to 24.7 mtpa from 18 mtpa by March 2020 through brownfield expansion with an investment of ₹44,415 crore.
Rao said the company will also take up plans to set up a 12-mtpa greenfield steel plant in Odisha after 2020.
Uncertain buys
Asked whether JSW has lost hopes on acquiring Essar Steel with such huge brownfield investment, he said the insolvency process appears to be a long-drawn battle with each case leading to litigation and that is exactly why the company has decided to focus on brownfield expansion which is a low hanging fruit.
There is also uncertainty over the company acquiring Monnet Ispat where it has emerged as highest bidder as the NCLT has raised some questions over valuation.
“We have nothing to do with the clarification sought by the NCLT. It is for the resolution professional and committee of creditors to decide on it now,” said Rao.
The company has started iron ore mining in one of its five mines in Karnataka and expects another mine to go on stream next fortnight.
Vinod Nowal, Deputy Managing Director, JSW Steel, said the company will mine about 4.3 million tonnes of iron ore this fiscal against 22 mtpa required at the Vijayanagar plant.
Overall, the company requires 32 mtpa of iron ore, he added.
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