Mumbai: The Sajjan Jindal-controlled JSW Steel has sought permission to acquire 2,980 acres to set up a mega steel plant at Paradip in Odisha and has also sought the green nod for the same.
“We have applied for 2,980 acre to set up a steel plant and are awaiting the final approval from Odisha. We are also seeking forest clearance for the plant at Paradip. We will decide on capacity of the plant once we have approvals in hand," JSW Steel joint managing director and group CFO Seshagiri Rao said.
JSW Steel, which is first time entering mineral rick Odisha state, had originally proposed to set up a 10 mtpa capacity shore-based steel plant. The state is expected to hand over the land it had acquired originally for a 12 mtpa steel project proposed by POSCO at Jagatsinghpur district. Rao refused to divulge investment details saying that will be finalised after the land allocation.
The Korean steel giant had in 2005 announced a Rs52,000 crore investment to set up a 12 million tonne plant but due to land acquisition issues abandoned the same after waiting for more than a decade. JSW Steel is in expansion mode and is also evaluating various opportunities for acquisitions to achieve the target of becoming 40 mt by 2030, Rao said.
JSW Steel is also scouting for three stressed assets and bidding for Bhushan Steel and Bhushan Power & Steel and Monet Ispat which are all at the NCLT. “We are actively looking at Bhushan Steel, Bhushan Power & Steel and Monnet Ispat & Energy. We have already submitted the resolution plan for Monnet Ispat and finalise bidding process for Bhushan Steel and Bhushan Power & Steel," Rao added.
Bhushan Steel, Bhushan Power & Steel and Monnet Ispat are among the first list of 12 large companies which were referred by the Reserve Bank to the National Company Tribunal Law (NCLT) for insolvency proceedings. Monnet Ispat, the flagship of the Monet Group, has a sponge iron unit with a capacity of 1 lakh tonne per annum. It also has an integrated steel plant in Raigarh in Chhattishgrah with HR coil capacity of 1.5 mt. Bhushan Steel owes an amount of Rs44,478 crore to its lenders. According to the information on Bhushan Steel website, it is the third largest secondary steel producer with an existing steel production capacity of 5.6 mt.
Commenting on expansion plans, Rao said the company’s doubling of steel making capacity from 5 mtpa to 10 mtpa is expected to be commissioned by March 2020. The expected project cost is Rs15,000 crore implying capital outlay of $470 per tonne. It is also expanding its Vijayanagar CRM complex capacity from 0.85 mtpa to 1.8 mtpa expected to be commissioned by September 2019.
The project cost is estimated at Rs2,000 crore, he said. To cater to the growing market of tinplate for packaging industry, the company is setting up a tinplate mill having 0.2 mtpa capacity at Tarapur in Maharashtra at an estimated cost of Rs650 crore.