Jul 04, 2013 08:32 PM IST | Source: PTI

New JSW steel plant at Bellary to start by December

The upcoming 2.3 million tonnes plant of JSW Steel which will produce high-grade automotive steel, will operationalise by December this year in Bellary, company's CMD Sajjan Jindal said.

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The upcoming 2.3 million tonnes plant of JSW Steel which will produce high-grade automotive steel, will operationalise by December this year in Bellary, company's  CMD Sajjan Jindal said.

"Our new plant which is designed specifically for the auto-industry is coming up by the end of this year (in Bellary, Karnataka)," Jindal told reporters on the sidelines of a function at ICRISAT on the city outskirts. The company has invested about USD 1 billion for the plant, he said.

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"...The project is already funded. By December it will be completed. It's a 2.3 million steel plant. It will generate about USD 2 billion of revenue once it attains full capacity. First year we expect the revenue generation will be USD 1 billion," Jindal said.

On if the company had talks with automotive customers, Jindal said, "We are already in talks with all the auto majors and most of them have approved the product quality."

"This (upcoming plant) is for all the steel for the car body. Skin panels are being imported (and once the plant is commissioned) they don't have to import anymore and it will be 100 percent indigenous steel," he said.

Japanese steel major JFE Steel is the technology partner for producing the auto-grade steel, he said. When asked if they were looking for exports from the proposed plant, he said it will be at a later stage.

"Right now India imports all the steel for auto-grade. We will be substituting the imports," Jindal said. In January 2011, the company had announced it will set up a new 2.3 million tonnes per annum (MTPA) cold rolling mill complex while targeting increase in its share in niche market segments like automotive steel, which is used in making body parts of cars and SUVs.

The new capacity will help JSW in meeting the demand of automobile industry for high end products like dual-phase steel and strip steel as well. Currently, most of the demand for such products is met through imports as there is not enough domestic manufacturing capacity.

According to industry estimates, the annual domestic demand of automotive steel is around 8-10 million tonnes.

To another query, Sajjan Jindal said, "The Karnataka situation (on iron ore) is getting better and over the coming months I think it will get resolved completely.
"The Supreme Court has already given their comprehensive plan which we expect will be implemented in toto in next 6-9 months. Once that is done the problem is resolved. Then we will be able to run full capacity. By that time we will go up to 12 million tonnes from current 10 million tonne, but now we are running at 75-80 per cent of capacity," Jindal said.
 "... You cannot import both (iron ore and coal) the raw material. We are already importing 100 per cent of the coal in Karnataka and you can't import iron ore (in such scenario). Logistically it will not be possible to bring so much of material," he said in reply to another query.
In Karnataka, the company runs a 10 million tonnes (MT) steel plant but it neither has a captive mine nor a long-term iron ore supply agreement and the company has to source the ore from open market.

For more than one-and-a-half year now, JSW has been running the Karnataka plant at a reduced capacity due to an iron ore crunch in the state.

Reacting to queries on the West Bengal project of JSW, (where it has put on hold plans to set up a 10 million tonnes steel plant), he said, "You may be aware that there are lot of problems regarding iron ore in Karnataka and similarly there is problem of iron ore in West Bengal also. So, unless that is resolved we will not be able to take the project forward."

Asked on how the problem was being tackled, Jindal said, "The West Bengal government is working with the Centre to get iron-ore mines allotted to West Bengal, which can be used for steel industry in that state."

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