JSW Steel Plans Major Capacity Expansion Amidst Domestic Growth
‘Europe will become irrelevant for us’: JSW Steel doubles down on India growth with massive capex plan
Image: The Economic Times
JSW Steel aims to double its capacity to meet India's growing steel demand, which surged from 100 million tonnes to 160 million tonnes over six years. The company plans to add 20 million tonnes of capacity by 2032, relying primarily on internal cash generation to fund this expansion, minimizing external capital needs.
- 01JSW Steel's hot-rolled flat capacity share in India is approximately 40%.
- 02The company expects to generate ₹37,000 crore (around $4.5 billion USD) of EBITDA at a capacity of 37 million tonnes.
- 03JSW Steel's current net debt-to-EBITDA ratio is 1.8x, with a target to remain below 2.5x.
- 04The company views Europe as an increasingly irrelevant export market due to structural decline and high costs.
- 05JSW Steel's green steel production is limited to 4 million tonnes due to economic viability challenges.
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JSW Steel is set to double its production capacity to meet the burgeoning demand in India's steel market, which has seen consumption rise from 100 million tonnes to 160 million tonnes over the past six years. Joint Managing Director Jayant Acharya highlighted that the company must add 20 million tonnes of capacity by 2032 to maintain its 40% market share in hot-rolled flat steel. The expansion will primarily be funded through internal cash generation, with the company projecting an EBITDA of ₹37,000 crore (approximately $4.5 billion USD) at a capacity of 37 million tonnes. Acharya noted that JSW Steel's current net debt-to-EBITDA ratio stands at 1.8x, with a target to remain below 2.5x, providing ample room for the planned capital expenditure. Additionally, JSW Steel sees Europe as an increasingly irrelevant market due to its structural challenges, while domestic demand continues to absorb the company's capacity. The firm is also cautious about green steel production, currently limited to 4 million tonnes, citing economic viability issues with hydrogen-based production methods.
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The expansion will likely lead to increased job opportunities in the steel sector and support India's infrastructure growth, benefiting various stakeholders.
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