JSW charts big cement, energy plans

After wresting control in the steel business, the $11-billion JSW group is looking to do an encore in the cement and energy space.

"It is the philosophy of the group to be among the top three in the country," Chairman and Managing Director Sajjan Jindal told this newspaper when asked about plans for the cement and energy businesses.

JSW has initiated talks with Lafarge to buy its India assets. Lafarge has a capacity of 11 million tonnes of cement making in India. If the deal comes through, it would take JSW's capacity from the current six mt to 17 mt in one stroke.

IN ACQUISITIVE MOOD

• JSW has initiated talks with Lafarge to buy its India assets
• The deal, if it materialises, would take JSW’s capacity from a level of 6 million tonnes (mt) to 17 mt
• JSW was also in talks with the Jaypee group to buy its entire cement business of 20-22 mt
• Funding is not a constraint for the group, says CMD Sajjan Jindal

Holcim, through its control of Ambuja Cement and ACC, has 60 mt of capacity. UltraTech Cement has 64.7 mt.

JSW had also been discussing with the Jaypee group for a while to buy its entire cement business of 20-22 mt. Funding, it appears, is not a constraint for the group, as Jindal recently said.

"No acquisition or expansion would be taken up unless they were value-accretive and contribute to the bottomline. I do not find any constraints in funding good acquisitions or expansions," he had said in a recent interview to Business Standard.

In the energy space too, JSW is looking to grow both organically and inorganically. It took over Jaypee's hydro projects and was believed to be in discussion for acquiring thermal projects, too.

In Bengal, Jindal recently announced the group would set up two units of 660 Mw at Salboni in West Medinipur, for Rs 8,000 crore. JSW Energy produces 3,140 Mw of power, with a capacity of another 8,630 Mw under implementation and development.

However, to be among the top three, it would have some catching up to do, as Adani Power has a generation capacity of a little over 10,000 Mw and Tata Power has 8,669 Mw.

JSW has achieved the said goal in steel, being the second largest in India, with a production capacity of 14.3 mt. Government-owned Steel Authority of India is the first, at 19.5 mt. In 2009, JSW surpassed the century-old Tata Steel on commissioning a three mt blast furnace at its Vijayanagar (Bellary, Karnataka) plant. It took JSW's capacity to 7.8 mt; Tata Steel was then at 6.8 mt. Then, in 2010, JSW acquired Ispat Industries. The next target JSW Steel has set is to take its installed capacity to 40 mt over the next decade, through expansion of existing units.