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JSW Steel to up capacity ten-fold

Ranju Sarkar  |  Mumbai 

JSW Steel plans to export 10 million tonnes of steel in the next 10 years. This is part of its plans to scale up its steel-making capacity nearly 10 times in the next ten years, JSW Vice-Chairman and Managing Director Sajjan Jindal told the Business Standard on Friday.
"In the next ten years, I want JSW Steel to be a 30-million tonne integrated steel maker in India. To spread my risks, I would like to sell 20 million tonnes in India and export 10 million tonnes,'' said Jindal, who is expanding his steel-making capacity at Vijayanagar from 3.8 million tonnes to 10 million tonnes by 2010, in two phases.
Jindal, who acquired the US assets of Jindal Saw last week for $900 million, plans to export 5 million tonnes as value-added steel products and 5 million tonnes of semi-finished steel like high-quality slabs, blooms and billets.
"We will build or acquire facilities abroad to market this 10 million tonnes," said Jindal. "The US acquisition is in line with this strategy. We will bring in the semis, roll it and make pipes. These pipes sell for $1,650 a tonne. I had not known that any steel product can be sold at that price."
JSW is expanding its steel-making capacity at Vijaynagar from 3.8 million tonnes to 6.8 million tonnes by March 2009, and from 6.9 million tonnes to 10 million tonnes by September 2010, CFO Seshagiri Rao said.
"We are increasing our power and coke oven capacity, and setting up 1 million cold rolling facility in Bellary. We are increasing our product profile by adding 1.5 million tonnes of long products capacity by December 2008," Rao said.
JSW has also signed agreements with Jharkhand and West Bengal to set up a 10-million-tonne steel plant in both states that will each cost Rs 35,000 crore.
"We have also acquired licences for coal in Jharkhand and Mozambique and have asked for additional iron ore mines in Bellary," Rao said.
The demand for steel has risen at 12-14 per cent in the last two years (China is still growing at 16 per cent).
"Demand for steel in India will continue to grow at 14 per cent or 7-8 million tonnes a year," said Jindal, who feels demand for steel in India could follow the Chinese trajectory.
"When China became a trillion-dollar economy, infrastructure-related activities got a fillip. When per capita purchasing power reaches $1,000, consumption of steel and cement shoots up. The demand for steel in China increased from 100 million tonnes in 1996 to 500 million tonnes in 2006," added Jindal.
India, which will consume 50 million tonnes of steel this year, could see a similar demand trajectory, feels Jindal.

First Published: Tue, August 28 2007. 00:00 IST