The Hindu : Business : JSW Steel to expand Vijayanagar unit capacity

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Friday, Oct 26, 2007
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JSW Steel to expand Vijayanagar unit capacity

K. Satyamurty

Reports 48 p.c. rise in second quarter profit

Expansion to involve Rs. 24,000 crore outlay
Looking at options to overcome rising input costs

BELLARY: JSW Steel of the Jindal Group, which posted its highest net profit of Rs. 511.23 crore for the quarter ended September 30, 2007, is looking at options to overcome the increasing costs of iron ore and coal, Vice-Chairman and Managing Director, Sajjan Jindal, told reporters here on Thursday.

“We had a 48 per cent growth in profit compared with the same quarter last year, mainly driven by volume growth and domestic demand which could withstand the increase in prices of finished steel of various types. Increasing demand has come from the automotive and white goods sectors,” Mr. Jindal said.

For the steel-maker, the 26 per cent growth in production has been matched by the rising costs of main inputs — iron ore and coal — doubling since last fiscal.

“We rely on NMDC and private mines in the area for 75 per cent of our ore needs. We feel disappointed that the Karnataka Government has not kept the terms of the MoU signed when we came here, to provide us mining rights for 30 years,” Mr. Jindal said.

At the Vijayanagar plant here, the installed capacity is planned to be increased to 10 million tonnes a year by 2010, involving additional investments of Rs. 24,000 crore, met mostly by debts and internal accruals and foreign investment of $325 million.

JSW has incorporated its acquisitions in the U.S., Jindal United Steel Corporation; Saw Pipes U.S. and Jindal Enterprises LLC into two entities — JSW Steel Holding (U.S.) Inc., and JSW Steel (U.S.) Inc.

These acquisitions together cost $40.9 billion.

A group company, Salem (Tamil Nadu)-based Southern Iron and Steel Company Ltd. (SISCOL), has been merged now with JSW Steel.

The Salem plant is expected to produce one million tonnes of steel eventually.

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