The cost of JSW Steel‘s third phase of capacity expansion at its plant in Dolvi will be among the lowest for brownfield expansions for the company, a top official told ET.
JSW Steel will spend a little over INR 19,000 crore on this capacity addition, which will help it cater to the demand for value-added special steel products, Jayant Acharya, chief executive officer of JSW Steel, said.
“It will be very cost effective since some of the infrastructure facilities are already there (and) some of the equipment are already there as part of phase two,” he said.
This investment will take the firm’s total capital expenditure to more than INR 64,000 crore in three years.
The country’s largest producer of steel announced that it will be adding another 5 million tonnes of capacity at its plant in Dolvi, Maharashtra, taking it to a total 15 million tonne per annum by September 2027. Pan-India, the company aims to have a total production capacity of 42 million tonnes by then.
The National steel policy 2017 envisages India’s steel production capacity at 300 million tonne by 2030-31.
While JSW Steel intends to have a capacity of 50 million tonnes by then, Tata Steel‘s target is to have a production capacity of 40 million tonnes.
“In Dolvi, we will hold the capacity at 15 million tonnes,” Acharya said. “We have brownfield options in Vijaynagar, BPSL and Jharsuguda, which gives us the leverage to go beyond 50 million tonnes.”
JSW Steel’s cost for adding five million tonnes of capacity at Dolvi is around USD 460 per tonne, significantly lower than the global average cost of USD 700 per tonne. The company plans to largely fund this capex through internal accruals.
