JSW to invest Rs 18,000 crore to expand cement business: Parth Jindal

We have now made a roadmap to scale-up our capacity by three times to 60 million tonnes over the next five years

PARTH JINDAL, the 33-year-old scion of the $23 billion revenue JSW Group, aims to make significant strides in the cement industry — currently dominated by UltraTech and Ambuja Cements. JSW Group is open to acquiring more companies, provided the valuations are favourable and it does not overburden the group with additional debt. In an interview with Dev Chatterjee, the managing director of JSW Cement and JSW Paints reveals plans to invest Rs 18,000 crore to treble cement capacity to 60 million tonnes per annum (mtpa), while the paint company is targeting Rs 10,000 crore in sales, despite increased competition from incumbent Asian Paints and soon-to-enter Aditya Birla Group. Edited excerpts:

JSW missed the opportunity to acquire Ambuja Cements last year. What’s the plan now to increase capacity?
 

We are aggressively expanding our presence in the cement business. When I took over the business in 2016, we had a capacity of 6 mtpa, which has now grown to 19 mtpa. By the end of 2023, we will reach a capacity of 21 mtpa.

We have charted a road map to scale up our capacity threefold to 60 mtpa over the next five years. During this period, we will be investing Rs 18,000 crore.

There are numerous synergies with JSW Group’s existing business lines. The industrial waste from our steel and power businesses is utilised as raw material for the cement business. As JSW Energy and JSW Steel continue to expand, the cement business will also naturally grow.

We have strategically acquired limestone mines in the recent Rajasthan auction. Additionally, we obtained limestone deposits from India Cements in Madhya Pradesh last year, where we invested more than Rs 3,200 crore. We have outlined a plan for organic growth to reach the 60 mtpa capacity milestone.

Will you consider acquisitions in the cement business?
 

Should any acquisition opportunities arise, we will evaluate them thoroughly. To move from 21 to 60 mtpa capacity, we plan to approach the public market by next year. The initial public offering proceeds will aid us in achieving the 60 mtpa goal. If acquisition opportunities come up, they could expedite our road map milestones and contribute to rapid growth, given the escalating demand for cement.

JSW Cement plans to be in the top five. With the addition of 40 mtpa, our total capacity will amount to approximately $60 per tonne. This represents the lowest possible cost, and I believe such an acquisition cost is hard to come by.

Aditya Birla Group is investing Rs 10,000 crore to enter the paint business. How do you view JSW’s paint business?
 

We ventured into the paint business in 2019, and last year, JSW Paints achieved a turnover of Rs 1,500 crore. By the end of 2023-24, we are on track to achieve a turnover of around Rs 2,500 crore.

Our current earnings before interest, tax, depreciation, and amortisation margin stands at 7-8 per cent due to substantial expenditures on advertising and sales promotion. As a result, our margins are slightly lower compared to competition. However, we aspire to be among the top three players in the paint industry. By the end of 2026-27 or the 2026 calendar year, we aim to achieve a revenue of Rs 10,000 crore.

We are expanding our manufacturing facilities at both locations and establishing a new manufacturing site in Madhya Pradesh.

JSW is investing significantly in its sports business. How do you envision the future of this business?
 

In the realm of sports, we have two distinct verticals: a profit-generating sports division that owns franchise teams including Bengaluru FC (football), Haryana Steelers (kabaddi), and a 50 per cent stake in Delhi Capitals (cricket) in the Indian Premier League and the Women’s Premier League.

Recently, we acquired the Pretoria Capitals team in the South Africa Twenty20 league, which achieved remarkable success by finishing as runners-up in the inaugural season.

Our commercial agency and talent management vertical represents some of India’s most prominent sports stars, including javelin thrower Neeraj Chopra.

The JSW Sports vertical is flourishing, branching into new revenue streams such as sponsorship consulting and content creation.

Moreover, we have a not-for-profit vertical that provides free training to track and field athletes at our facility. The Inspire Institute of Sport (IIS) at JSW Vijayanagar in Karnataka’s Bellary district has been operational since 2017, training Olympians like Sakshi Malik, Neeraj Chopra, and Bajrang Punia, and currently supporting 250 athletes in various Olympic sports.

Around 5,000 athletes are training with JSW Sports, encompassing our teams and Olympic disciplines like boxing, wrestling, judo, track and field, and swimming. We scout for talent nationwide, bring them to IIS at JSW Vijayanagar, and prepare them for the Olympics and Asian Games. Several of our players will be competing in the Asian Games in Hangzhou, China, this September.