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JSW Steel plans to raise capacity at its Bellary plant by 60 per cent to 16 million tonnes a year at an estimated investment Rs 30,000 crore that will make the unit the largest single-location steel facility.
The proposal to raise the capacity from 10 mtpa now was put up by the Sajjan Jindal-led steel maker earlier the month to the Steel Ministry which has forwarded to Environment and Forest counterpart for its approval, sources in the know said.
The capacity addition plan is in line with JSW Steel’s overall target of achieving a portfolio of 40 mtpa by 2025 which in turn would help the steel maker to retain its market share of 13-14 per cent.
JSW Steel has 14.3 mtpa installed capacity spread across Karnataka, Maharashtra and Tamil Nadu. In July this year, company Chairman Sajjan Jindal had announced plans to increase the overall steel capacity to 40 mtpa by 2025, which will entail a capital outlay in the range of $ 22 billion.
M V S Seshagiri Rao, JSW Steel’s Joint Managing Director and Group Chief Financial Officer, could not be reached for comments immediately.
The capacity raising plan of the company is in sync with government’s plan of more than trebling country’s steel making capacity to 300 mtpa by 2025 requiring a whopping $ 200 billion investment over the next decade.
It generally takes $ 1 billion investment to create a one million tonne steel capacity. Going by the industry thumb rule, JSW Steel may have to invest $ 6 billion or roughly about Rs 36,000 crore to crate the additional capacity.
However, since the expansion would be brownfield in nature, it might require less for the company, but not less than Rs 30,000 crore, an industry source said.
With the objective of touching 40 mtpa in next decade, it is expanding capacities at its existing sites and setting up plants in new locations.
“On the anvil are two 10 million tonne greenfield facilities in West Bengal and Jharkhand,” it said in its website.
The company was the largest exporter in the country during the April-September period of the current fiscal, contributing 61 per cent of the total shipments.
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