JSW Steel reportedly plans to invest more Rs. 5,000 crore towards strengthening its downstream production capabilities along with pursuing stressed downstream assets which would come up in the next round of bidding. Apparently, the company is also reducing its focus on the commodity steel space as a part of the company’s long term play.
Seshagiri Rao, Joint MD of JSW Steel, mentioned that the next set of assets will either be very small capacities or downstream. If it makes sense to the company’s downstream integration strategy, it would evaluate the asset and then pursue it. The circular economy is getting very active and the demand of very high-value steel products is increasing, he said.
Supposedly, the downstream capabilities’ investment by the company is focused on capitalizing on the incremental demand which is anticipated to be generated around sectors for specialized steel. The steel intensity across various applications is coming down, even though steel consumption of 300 million tons (MT) is predicted to come in.
JSW Steel’s Director Commercial for Marketing and Strategy, Jayant Acharya, was quoted saying that the company aims to look for very de-competitive business segment as a major indication of putting more focus on the special steel categories. JSW Steel would also lower its focus in commodity space and enter special steel and alloy steel space in order to make the company more sustainable in the long run.
As stated by Mr. Rao, there will a growth of 60 per cent in the downstream capacity, a growth of 140 per cent in the color coated capacity, a six-fold increase in the tinplate capacity. JSW Steel’s overall capacity is expected to increase by 40 per cent in the coming three years. The company predicts customization products to contribute 60 per cent of its future volume, while special steel products would add the rest 40 per cent.