Jindal Steel & Power (JSPL) has drawn up ambitious plans to become the third largest steel producer in the country. The revenues from its steel business are expected to increase by over five times to Rs 80,000-1 lakh crore by 2020.
Besides, it is also ramping up its steel production capacity to 14 million tonne per annum (mtpa) in the next two years.
V R Sharma, deputy managing director and CEO, steel business, JSPL told Business Standard that by 2015, the company will increase its steel capacity to 14 MTPA, while it will also have a pellet (direct reduced iron) capacity of 14.5 MTPA by 2015.
It is also targeting to be third largest steel maker in India by 2015 from currently the sixth largest. The top slot is occupied by Steel Authority of India Ltd followed by the private sector player JSW.
The company would be investing about Rs 30,000 crore in Angul, Odisha for setting up of a steel plant with a capacity of 6MTPA. Another, Rs 11,000-12,000 crore would be invested in Patratu, Jharkhand for steel capacity of 3 MTPA.
Sharma said the company would continue to focus on steel business and it will be a major part of JSPL’s portfolio. However, the company may look at separating power and steel business and setting up two separate entities in the near future.
Jagannadham Thunuguntla, Research Head, SMC Global said there are challenges involved but the company will do well. It is also expected to post its annual and fourth quarter results above estimates.
He said global scenario is little vague but the demand in steel industry is expected to pick up with the revival of the US and Japanese markets.
JSPL will announce its financial results on Thursday.
Currently, JSPL has a steelmaking capacity of 3MT at its plant in Raigarh, Chattisgarh. Besides, it has a 1.4 MT sponge iron plant and 1.7 MT hot metal at Raigarh. Another 4.5 MT pellet plant at Barbil, Odisha, 1.6 MT wire & bar mill at Patratu, Jharkhand and 1.5 MT HBI Plant at Sohar, Oman.
In July 2010, JSPL had acquired Shadeed Iron & Steel Co (Shadeed), which has a installed 1.5 MTPA Gas-based HBI plant at Sohar Industrial Port and commenced production in January 2011. The company is also adding 2 MTPA capacity in Oman with an investment of about Rs 6000 crore, Sharma said.
It has been aggressively looking for acquiring coking coal and iron ore mines in international areas. Coking coal is one of the main ingredient for producing steel. In its website, the company says there is a strong demand for steel in the Middle East and North African countries with a supply shortfall estimated to be more than 15 million tones. It is also exploring steel production and mining projects in Brazil, Indonesia and Mongolia.