The race to build steel capacities is gaining momentum in India. JSW Steel, the largest steelmaker in the country, plans to increase domestic crude steel capacity from 27.7 million tonnes (MT) to 37 MT a year by March 2025. The company will spend ₹37,300 crore in this period as capital expenditure. Its rival, Tata Steel, looks to double its domestic capacity to 40 MT by 2030. For achieving the target, the company will spend ₹12,000 crore in this financial year.
N Chandrasekaran, chairman, Tata Group, says at the Tata Steel annual general meeting that India would continue to remain a major consumer within the global steel industry owing to infrastructure development, rapid urbanisation, and supportive policy reforms. “We expect the steel demand to keep pace with the GDP growth over the next decade,” he says.
According to Sajjan Jindal, chairman, JSW Group, domestic steel consumption has increased by 13.3% to 120 MT in FY23. “Looking ahead to FY24, we anticipate an incremental steel demand of 8-10 MT in India,” he says in the annual report. JSW Steel is also looking to expand the capacities of the acquired entities, Bhushan Power and Steel and JSW Ispat Special Products (Formerly Monnet Ispat).
The average capacity utilisation of JSW Steel stood at 90% in FY23. The company will spend ₹18,800 crore in this financial year, followed by ₹18,500 crore and ₹14,625 crore, respectively, in the next two financial years. Actual spending in the last financial year was ₹14,214 crore. The steelmaker has a gross debt of ₹80,064 crore.
Tata Steel wants to increase its domestic capacity to 40MT by 2030 from 21.6MT at present. It is already expanding the capacity at the Kalinganagar plant in Odisha to 8MT from 3MT. In order to augment the domestic capacity, the steel maker made a slew of acquisitions including Bhushan Steel, the steel business of Usha Martin, and Neelachal Ispat Nigam Ltd in the last 3-4 years. The consolidated gross debt of Tata Steel increased to ₹84,893 crore in March from ₹75,561 crore a year back.
For FY24, Tata Steel has earmarked ₹10,000 crore capex towards its standalone operations -- including ₹7,000 crore for Kalinganagar expansion -- and ₹2,000 crore separately for its Indian subsidiaries. Tata Steel Nederland will incur a capex of ₹1,100 crore on the relining of its blast furnace, which is underway. The remainder of the capex will be spent on sustenance, environmental initiatives, and improvement projects. In the last financial year, the company spent ₹14,142 crore on capital projects across India and Europe.
Lakshmi Mittal-controlled ArcelorMittal, the world’s largest steelmaker, and its joint venture partner Nippon Steel are investing ₹60,000 crore to expand steelmaking capacity in Hazira to 15 MT from 9MT. The investment is also for the installation of new steel-making technologies and machinery and increasing the product mix. Captive renewable energy capacities will also be built there for the production of green steel at the plant.
In addition, the Odisha government had approved the proposal of ArcelorMittal Nippon Steel (AMNS) India Ltd to set up a 7MT steel plant in Jagatsinghpur district. The company will be investing ₹38,000 crore initially for the project.
Public sector steel major, Steel Authority of India Ltd (SAIL), will take its capacity to 34-35 MT by FY31 from the present 19.5 MT.
Leave a Comment
Your email address will not be published. Required field are marked*