JSW to invest ₹65,000 cr for new steel plant in Odisha

JSW Steel, part of the $23-billion JSW Group, is establishing a greenfield complex in the industrial city of Paradip that will include a steel plant with a production capacity of 13.2 million tonnes per annum (mtpa) as well as a cement manufacturing unit. The investment will be in phases.

The company at present has a total manufacturing capacity of 28.5 million tonnes (mt), which includes India’s current largest steel plant—JSW Steel’s facility in Vijayanagar, Karnataka that has an annual capacity for producing 12 mt of steel. The company is upgrading this facility’s manufacturing capacity to 18 mtpa.

JSW Steel’s latest addition in Paradip aligns with the national steel policy’s target of boosting India’s total steel manufacturing capacity to 300 mt by 2031, from about 161 mt now.

“Based on the announced investment pipeline, the steel industry is set to augment its capacity by about 40 million tonnes between FY24 and FY27, nearing a total installed capacity of close to 200 million tonnes upon project completion…,” said Priyesh Ruparelia, vice-president and co-group head, corporate ratings, at Icra Ltd. “However, the pace of capacity growth hinges on the timely execution of these expansion initiatives.”

JSW’s new complex will be set up on over 2,958 acres of land handed over to it by the Industrial Development Corporation of Odisha. The group said it plans to use about 30% of the land for preservation of forest and water bodies.

“Steel plays the most important role in building any great nation. A steel plant changes the lives of future generations and positively affects the economy in many ways,” said Sajjan Jindal, chairman of JSW Group, following a foundation-laying ceremony on Friday that was presided over by Odisha chief minister Naveen Patnaik.

“There will be a total investment of ₹65,000 crore in this facility and more than 30,000 direct and indirect employment potential,” Jindal said.

Earlier this week, JSW Steel announced plans to set up a ₹5,500-crore, grain-oriented electrical steel manufacturing facility through a joint venture with Japan’s JFE Steel Corp. in Karnataka.

At a press briefing on Thursday, Santrupt Misra and Sasmit Patra, national spokespersons for the Odisha’s ruling Biju Janata Dal party, said the state was seeking substantial private investments to boost its economy.

He also said the state government had approved about 1,860 industrial projects over the previous 5 years, receiving total investments of about ₹11.63 lakh crore and creating employment opportunities for over 733,000 people.

According to analysts, the consistent flow of investments from the steel industry into Odisha, which has a 485-km coastline along the Bay of Bengal, is owing to its mineral-rich characteristics and the government’s policies.

“Odisha being a mineral-rich state has high-quality iron ore reserves, which is a critical raw material for a steel plant. Moreover, the presence of thermal coal mines supports the operation of captive power plants for the steel companies in the region,” said Icra’s Ruparelia.

The JSW Group has also signed a memorandum of understanding with the Odisha government for an electric vehicle and a battery manufacturing unit in Cuttack and Paradip. The company will invest ₹40,000 crore for the manufacturing plants, it had said.

Earlier this week, Kalyani Steel Ltd announced a plan to invest ₹26,000 crore to set up a titanium metal and aerospace components manufacturing facility and an integrated specialty steel and automotive components manufacturing complex at Gajamara in Odisha.

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Published: 16 Feb 2024, 02:44 PM IST