STRATEGIC FOCUS AREAS > S1
STRATEGIC GROWTH
S1
STRATEGIC
GROWTH
Our strategic growth ambitions are fulfilled by organic and inorganic expansions, which align with our standards, scale and appetite for capital expenditure.
At present, JSW Steel is undertaking a large-scale organic capex plan and is completing the acquisition of a major steel player in east India. Over the long-term, we will continue to sustain a 15% production share of crude steel in India, which translates to a 45 MnT expected capacity by 2030.
Material issues
M1 Capacity expansion – organic
M2 Capacity expansion – inorganic
Strategic drivers and operating context
India continues to be one of the world’s most preferred investment destinations. The country’s long-term optimism is supported by strong and reform-oriented governance, policy continuity, a predominantly young and aspiring population, and focused approach to infrastructure creation.
The country has a significant headroom for growth in production driven by consumption. This also corroborates with the Government of India’s vision of increasing India’s per capita steel consumption to 160 kg by the end of the next decade. Towards this effect, the National Steel Policy (NSP) has been rolled out, encouraging steelmakers in the country to ramp up production. The policy projects the building of 300 MnT crude steel capacity in India by 2030.
300 MnT
Expected crude steel capacity in India by 2030
as per the new NSP
Action plan
Objectives of the National Steel Policy, 2017
CREATE SELF-SUFFICIENCY IN STEEL PRODUCTION BY PROVIDING POLICY SUPPORT AND GUIDANCE TO PRIVATE MANUFACTURERS, MSME STEEL PRODUCERS AND CENTRAL PUBLIC SECTOR ENTERPRISES (CPSES)
ENCOURAGE ADEQUATE
CAPACITY ADDITIONS
FACILITATE FOREIGN
INVESTMENT
ENHANCE THE DOMESTIC
STEEL DEMAND
DEVELOP GLOBALLY COMPETITIVE STEEL MANUFACTURING CAPABILITIES
ASSET ACQUISITIONS OF
RAW MATERIALS
COST-EFFICIENT
PRODUCTION
DOMESTIC AVAILABILITY OF IRON ORE, COKING COAL AND NATURAL GAS
Key metrics
TOTAL INSTALLED CAPACITY (JSW STEEL STANDALONE)
(MTPA)
COVID-19 impact
Our large-scale capex programme to ramp up production capacity had been primarily front-loaded, with a significant proportion of the plant setup complete. However, as a result of the pandemic, the following steps are being undertaken:
- Deferring of capex worth ` 6,508 crore to FY 2020-21 from FY 2019-20
- Commissioning of extended capacities at Dolvi Works has been postponed to Q2 FY 2020-21, as the pandemic caused unintended operational roadblocks
- Continuing capex for cost-saving projects with full vigour, while additional investments for VASP capacities have been postponed
- Re-evaluating our overseas capex ambitions, based on the evolving global trade scenario
Key risks
R4 Regulatory and compliance
R7 Declining global liquidity
R8 Mergers & acquisitions
R10 Energy security
R11 Environment protection and climate change
R12 Occupational health and safety
Organic growth
Within the next decade, we aim to increase our total steel production capacity in India to 45 MTPA.
As the initial step towards this, we are currently undertaking a large capex programme, with an outlay of ` 48,715 crore till FY 2021-22
33%
GROWTH IN CRUDE STEEL CAPACITY (FROM 18 MTPA TO 24 MTPA)
60%
INCREASE IN DOWNSTREAM CAPACITIES (UP BY 3.95 MTPA)
Cost saving projects
- Setting up facilities with backward integration
(8 MTPA pellet plant, 3 MTPA coke oven,
225 MW CPP) - Conveyor systems for material handling
Capacity expansion progress
VIJAYANAGAR WORKS
- In Vijayanagar, the work on capacity upgradation of BF-3 from 3.0 MTPA to 4.5 MTPA, along with the associated auxiliary units, is under implementation
- We have undertaken a project to install a new 160 tonne Zero Power Furnace and a 1.4 MTPA billet caster, along with associated facilities at SMS-3 to enhance the steelmaking capacity
- We are also installing Wire Rod Mill No.2 of 1.2 MTPA capacity to enhance overall plant capacity.
DOLVI WORKS
We are doubling the installed capacity from 5 MTPA to 10 MTPA to enhance the capacity of flat products portfolio, with the expected commissioning in the second half of FY 2020-21. The capacity expansion would install a 4.5 MTPA blast furnace with a supporting 5 MTPA Steel Melt Shop (SMS) and a 5 MTPA Hot Strip Mill (HSM). The plant would also have an 8 MTPA pellet plant and four kilns of 600 TPD Lime Calcination Plants (LCPs).
Inorganic growth
At JSW Steel, we pursue active growth to make the best of the opportunities in front of us. While we are looking at increasing our capacities and overall output through organic expansion, we are also on the constant lookout for avenues where we can merge with or acquire facilities that can deliver significant synergies for us.
In the past three financial years, we have acquired stakes (majority and minority) in multiple steel and steel ancillary companies, which drive different synergies for us.
RECENT ACQUISITIONS/STAKE PURCHASES
Vardhman Industries Limited
0.12 MTPA
CAPACITY
Helps consolidate the downstream or value-added steel products industry in the country
Monnet Ispat and Energy Limited (JV)
1.5 MTPA
CAPACITY
Located close to the mineral-rich belts of Chhattisgarh and Odisha, this acquisition extends our reach to the central, northern and eastern markets
JSW Steel Italy Piombino S.p.A. (previously Aferpi S.p.A)
1.3 MTPA
FINISHING CAPACITY
Serves as our captive conduit to the European markets
JSW Steel USA Ohio (previously Acero Junction)
1.5 MNTPA*
INTEGRATED STEEL
PLANT WITH A
FINISHING CAPACITY
OF 3 MNTPA*
*Million net tonnes per annum
Helps serve the US market by making and finishing steel products within the country, giving us market access
OUTLOOK
Near-term
Complete the capex projects as per stated plan
Long-term
Continue to evaluate organic/inorganic growth opportunities to achieve 45 MTPA capacity in India by FY 2030-31
Pursue greenfield upstream project(s) in Odisha to fully leverage captive iron ore mines and port proximity
