JSW is set to become India’s largest steelmaker by March of this year, states a report.
With several expansions in the pipeline, JSW’s combined capacity is set to become 14.3Mt/y by March overtaking public sector major SAIL, which is 13.5Mt/y.
According to a Times of India report JSW is set to buy a majority stake in Ispat industries which would help boost its capacity by 3.3Mt/y.
JSW would be the largest steelmaker in the country until at least November this year, when Sail is set to add 2Mt extra to its capacity. JSW’s combined capacity is already ahead of the domestic capacities of private sector players such as Tata Steel (7Mt) and Essar Steel (8Mt).
According to the report, acquisitions have become a trend in the Indian industry rather than growing organically.
Sajjan Jindal, MD, JSW Steel, said: “It is very hard to set up greenfield capacities, it is like building a universe.” By acquiring a substantial stake in Ispat, JSW has got ready capacity to operate.
Tata Steel and ArcelorMittal would have got the same advantage had their talks with Ispat materialised.
“It is a wake-up call for the entire industry. Smart money knows the value of steel capacity in India. Jindal is a second generation entrepreneur.
“He knows the difficulties in getting land, resources and the required infrastructure to set up a steel unit,” said Ankit Miglani, managing director, Uttam Galva, which entered into a co-promotion agreement with ArcelorMittal, giving the latter a direct entry into the Indian steel market.
Along with a Compact Strip Mill, Ispat also has an in-house jetty, with a cargo handling capacity of 12Mt/y that gives it an added advantage. Ispat’s mining concessions in India and overseas along with the geographical location of the plant in the west of India makes it more attractive.
JSW said it would facilitate sourcing of key inputs such as coke, pellet and power which will reduce the cost of production. JSW’s extensive pan India network will provide Ispat with better market penetration. JSW aims to produce 34Mt/y by 2020.