Jindal Steel Plans $18 Billion Investment for 20 Million-Ton Capacity Expansion

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--India's Jindal Steel and Power (JSPL) is planning a major investment program of more than $18 billion to expand steel-making capacity to 20 million tons a year through 2020. Chairman Naveen Jindal said that the company was in the process of expanding the Raigarh plant to a capacity of 7 million tons a year, followed by new, enlarged capacities at Angul in Odisha and at Jharkhand.

Currently, JSPL has an annual capacity of 3 million tons at Raigarh in Chhattisgarh, and is planning to commission the first phase of a 6 million-ton-per-year plant at Angul by 2013-14. The company also is building a plant with a 6 million-ton-per-year capacity at Jharkhand. The process to acquire land and other regulatory clearances to expand the Chhattisgarh plant to 7 million tons of annual capacity has already been initiated.

JSPL previously announced that it will invest $8.8 billion in a 2015-16 expansion program, funded through a mix of debt and internal resources. In March 2012, the company carried a debt of about $3 billion and a debt-equity ratio of 0.61. At the end of the last fiscal year, the company showed a cash profit of more than $1 billion.

The Indian steel industry is expected to commission 30 million tons of additional capacity over the next two years, and at the same time is working on a new national steel policy that targets higher-than-expected growth in steel demand and consumption over the next five years, despite current crises in the power and resources supply chains. In 2012, it is possible that 10 million to 15 million tons of steel production could be added. In the next five to seven years, some of the planned mega-integrated steel plants are due to begin production, according to P.K. Misra, union steel secretary .

For related information, see March 23, 2012, article - Indian Steel Industry Booms with $130 Billion of Active Projects.

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