JSW Steel is now the largest steel maker in India with an installed capacity of 18 million tonnes (mnt), ahead of long- time market leader Steel Authority of India (SAIL). The company produced a total of 10.7 mnt crude steel during Apr-Nov’16 (8 months) overtaking SAIL’s 9.46 mnt and Tata Steel’s 7.29 mnt in the same period of FY17. With its plants at 6 strategic locations in South and West India, the company has been steadily raising its production capacity in the home market through brown field expansions and strategic acquisitions. Based on 8-month production figures, it is estimated that JSW Steel’s crude steel production will touch ~16 mnt by the end of current fiscal ahead of its domestic peers; SAIL (~14 mnt) and Tata Steel (~11 mnt).
Earlier in FY16, JSW recorded net sales (highest among peers) of INR 529.7 billion in the year ended March (2015) against INR 457.1 billion achieved by SAIL. In comparison, Tata Steel’s India operations reported net sales of INR 336.7 billion during the same period.
As shown in the table above, JSW’s crude steel capacity grew to 18 mnt in the current year from 14.3 mnt in FY16. This was owing to capacity expansions at two of the upstream steel making locations of the company.
In FY17 (from April’16 to Nov’16), out of the total domestic crude steel production of 64.46 mnt, JSW turned out to be the single largest producer with 10.7 mnt share. SAIL and Tata Steel produced 9.46 mnt and 7.29 mnt crude steel respectively.
“We will continue to focus on volumes; we have given a 15 million tonne sales guidance for FY17, and we stick to that guidance. So we will be doing 15 million tonne of sales in this fiscal year but as regards to EBITDA, there is pressure in this quarter and we expect some recovery in the next quarter”, said Mr Seshagiri Rao, Joint MD & Group CFO at JSW Steel.
JSW plans to aggressively add more steel capacity, growing both organically and through acquisitions over the next decade (by 2025). The company plans to set up green field integrated steel plants in West Bengal and Jharkhand while adding further capacities at the Vijayanagar and Salem plants. There are reports that Tata Steel will raise its production capacity to 15 mnt pa from its existing capacity of 12.7 mnt.
SAIL also plans to raise its capacity to 21.4 mnt pa by 2020. Among other steps taken to give a boost to the steel industry, SAIL has undertaken modernization and expansion of its integrated steel plants at Bhilai, Bokaro, Rourkela,
Durgapur and Burnpur. At the same time, working towards its aim of growing capacity to 300 million tonnes of crude steel by 2025-26, the Ministry of Steel has evolved a concept of developing Ultra Mega Steel Plants (UMSPs) and SAIL is participating for setting up of a UMSP of capacity (3 + 3) or (4 + 2) million tonnes per annum in Bastar, Chhattisgarh.
Source: Steel 360 Magazine Jan’17 Issue