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JSW, Tata in race for top slot in steel industry

Two steel majors look at capacity expansion, as insolvency process picks up steam for 5 firms

Ishita Ayan Dutt  |  Kolkata 

steel, iron, Essar, Bhushan

The largest steelmaker in the country, JSW Steel, is aggressively ramping up capacity to  retain top slot, while the number three player, Tata Steel, too, has its agenda set to spring back to its earlier leadership position. 

The race has heated up even as the (RBI)-mandated insolvency process has gained speed for five other majors in the sector — Essar Steel, Bhushan Steel, Bhushan Power & Steel, Monnet Ispat & Energy, and

The two steelmakers will use a mix of organic and inorganic routes to achieve their goals. At present, JSW Steel, with a capacity of 18 million tonnes, followed closely by public sector steel major, Steel Authority of India (SAIL) with a capacity of 17.5 million tonnes. has a capacity of 12.7 million tonnes. 

By the end of the year, however, SAIL is expected to complete its expansion and modernisation programme at the Bhilai steel plant, which will take its capacity to 21.3 million tonnes. No further expansion has been announced by SAIL.

But, and are both ready to cash in on the opportunities in the domestic market. 

will be ramping up the capacity from 18 million tonnes to 23 million tonnes by 2020. The capex programme for this, along with a few other strategic projects, is pegged at Rs 26,800 crore.

“We have taken advantage of opportunities at the right time and yet kept the debt profile balanced. We have a target of taking the capacity to 40 million tonnes by 2030, which would be through a mix of organic and inorganic routes,” said Director (commercial and marketing) Jayant Acharya.

Tata Steel, which was the largest steelmaker in the private sector in India till about 2009, also has its agenda set. It already has approval for adding another million tonne to the existing 9.7 million tonne at Jameshedpur and plans to take up the second phase of expansion at Kalinganagar in the near term. 


But Tata group’s new chairman, Natarajan Chandrasekaran, has set aggressive growth targets for in India.

At a press conference to announce the Tata-Thyssenkrupp joint venture, Chandrasekaran had said a deleveraged would be better positioned to grow faster and double capacity over the next five years, organically or inorganically. That would mean taking Tata Steel’s capacity to 25.4 million tonnes by 2022.

“Till around a decade back, both and JSW had similar steel making capacities in India. Thereafter, JSW increased the size of its steel making operations at a faster rate than through both organic and inorganic routes. Currently, both are in the midst of ramping up their operations further through implementation of brownfield expansion projects,” Jayanta Roy, senior vice president, ICRA, said.

Growing in India makes sense for the because there are some positive indicators. Domestic demand has grown 4.4 per cent in April-August 2017 compared to 2.6 per cent in FY2017; domestic steel prices have grown 14 per cent since June 2017, steel exports have reported a 57 per cent year-on-year growth during April-August 2017 and capacity utilisation has improved to above 80 per cent during the current financial year, according to ICRA. 

Industry sources point out that it may not be possible for to double capacity through the organic route alone if the deadline of 2022 is to be met. has said it would look at opportunities thrown in by the insolvency process. Though it hasn’t named specific assets, but it hasn't ruled out bidding for assets in the east or west in the country. 

Among the major assets in the east include Bhushan Steel while the west would include Essar Steel. has said that it would bid for Bhushan Steel, Monnet Ispat & Energy while Essar Steel wasn’t ruled out either. 

An acquisition of any of the bigger assets like Bhushan Steel with a capacity of 5.6 million tonnes or Essar Steel at 10 million tonnes could change the pecking order of the industry.

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First Published: Wed, October 11 2017. 02:06 IST
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