JSW to become India's largest steelmaker with Bhushan Power takeover

JSW to become India's largest steelmaker with Bhushan Power takeover

JSW Steel's steelmaking capacity will increase to 21.5 MT from 18 MT post Rs 19,700 crore acquisition of Bhushan Power and Steel

In the fight for supremacy in the Indian steel sector, Sajjan Jindal-controlled JSW Steel will overtake Steel Authority of India (SAIL) and Tata Steel in production capacity, after the acquisition of Bhushan Power and Steel (BPSL). JSW Steel's steelmaking capacity will increase to 21.5 million tonne (MT) from 18 MT post the Rs 19,700 crore acquisition, for which it has got the green signal from National Company Law Appellate Tribunal (NCLAT).

Tata Steel had become the largest steelmaker in India with a capacity of 19.6 MT with the Rs 35,200 crore worth acquisition of Bhushan Steel (BSL) in May 2018. Soon after in June 2018, Prime Minister Narendra Modi dedicated SAIL's modernized Bhilai Steel Plant to the nation and with this, the steelmaking capacity of the state-run company had increased to 21 MT. SAIL had spent Rs 70,000 crore for the modernization and expansion programme.

In September 2018, JSW Steel-Aion Investments jointly acquired another bankrupt firm Monnet Ispat & Energy at a cost of Rs 2,875 crore. It has 1.2 MT capacity and it is not added to the capacity of JSW Steel since the Indian partner is minority promoter shareholder in Monnet. They are investing about Rs 1,000 crore to expand Monnet's capacity to 2 MT.

JSW Steel is increasing its capacity at the Dolvi plant, which was formerly Ispat Energy, to 10 MT from 5 MT and at the Vijayanagar plant CRM-1 complex to 1.8 MT from 0.85 MT. The Dolvi expansion is expected to be completed by September 2020. With the completion of the expansions, the capacity will increase to 24 MT. Including BPSL and Monnet, the capacity under JSW's ambit would be around 29 MT.

In the case of Tata Steel, the consolidated crude steel production capacity in India stands at 19.6 MT with manufacturing facilities in Jamshedpur in Jharkhand, Kalinganagar and Dhenkanal in Odisha, Sahibabad in Uttar Pradesh and Khopoli in Maharashtra. The steelmaker has commenced the phase 2 expansion of its Kalinganagar steel plant to 8 MT from 3 MT. The Rs 23,500 crore expansion project is expected to be completed by 2022.

In Europe, Tata Steel through the acquisition of Corus Plc in 2007 has emerged as one of the largest steel producers. It has a crude steel production capacity of over 12.3 MT at present. With the steelmaking facilities in the UK and the Netherlands and downstream plants across Europe, it supplies strip steel products to automotive, construction, packaging and engineering industries. In South-East Asia, Tata Steel operates through subsidiaries NatSteel and Millennium Steel. Including its all production units, Tata Steel has 33 MT steelmaking capacity across the world.

The third private player in the Indian industry, ArcelorMittal Nippon Steel India, which acquired bankrupt Essar Steel, has a capacity of 10 MT. The company has 14 MT iron ore pellet facilities in the east. ArcelorMittal plans to increase the finished steel shipments to 8.5 MT in the medium-term by completing the ongoing capital expenditure plans, enhancing the efficiency and commissioning of additional assets. The company's medium-term goal is to double the steel production from the Hazira plant to 15 MT from 7.5 MT at present.  

SAIL plans to increase the production capacity to 50 MT in two phases. By 2030-31, the PSU would ramp up production capacity to 50 MTPA.

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