Challenges galore but on track to up production: JSW Steel

JSW Steel, which currently has a production capacity of around 28 million tons per annum is eyeing to enhance its capacity to 51 million tons by FY26 and further to 73 million tons by FY31.

This, even as the steel sector is facing many challenges in terms of high logistics cost on account of slow-moving trains and high fuel costs in moving materials through roads.

Speaking at the India Steel 2023 conference organised by industry body FICCI, Sanjay Rath, Executive Vice President - Commercial & Logistics Centre of Excellence, JSW Steel highlighted the comparatively slow speed of Indian trains and the high logistics cost as a per cent of GDP.

The average speed of cargo trains is around 25kms per hour in India, lower than 33kms per hour in the US, he said while adding that logistics cost as a per cent of GDP is pegged at 14 per cent in India, much higher than 8 per cent in the US and 10% in Europe, he says while speaking at the conference.

In terms of road transportation, Rath said that heavy duty vehicles that are typically used to move materials in India are less fuel efficient -- and carry lower loads -- compared to other geographies leading to higher fuel consumption and thereby higher fuel costs.

He, however, added that JSW Steel is taking important steps to address these concerns by increasing their dependence on green logistics and electric vehicles.

Some of the initiatives of JSW Steel include deploying BFNV rakes -- specially designed to carry steel coils -- at its Vijayanagar and Dolvi plants and owning & operating 18 8000 tons mini bulk carriers that operate between Jaigarh and Dharamtar and provide last mile connectivity for raw material at Dolvi, Maharashtra along with laying pipe conveyors, and slurry pipelines.

During the afternoon trading session, shares of JSW Steel were trading 1.27 per cent higher at Rs 728.30 even as the benchmark Sensex was marginally in the red.

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