The Sajjan Jindal promoted Jindal Iron & Steel Company (Jisco) and Jindal Vijaynagar Steel (JVSL) have announced an expansion plan that will cost around Rs 2,000 crore (Rs 20 billion) over the next couple of years.
While the hot rolled capacity of JVSL will be ramped up to 4 million tonne per annum, from the current capacity of 2.5 million tonne per annum, Jisco's cold rolling capacity will be increased to one million tonne per annum, from the existing 8 lakh tonne per annum. Galvanizing capacity at Jisco will also be increased to 9 lakh tonne per annum.
The company has also lined up a 200 MW power project and is looking at acquiring a strategic stake in coal mines in Australia.
Sajjan Jindal, chairman & managing director, Jisco, said: "The merged entity will invest around Rs 2,000 crore in raising capacity of out hot rolled coils and slabs, along with debottlenecking in our cold rolling and galvanizing facilities in the next couple of years."
The company is planning a mixture of debt and internal accruals for the proposed expansion plan. "We are looking at raising around Rs 700 crore (Rs 7 billion) from local financial institutions for the expansion of out hot rolled capacity, while the balance will be generated through internal accruals," Jindal said.
The estimated cost of the hot-rolled coil expansion is Rs 1,100 crore (Rs 11 billion), he added. The proposed increase in the hot rolled coil capacity will be completed by March 2006, while the galvanising and cold rolled coil capacities will stand enhanced by March 2005.
The company is also looking at setting a 200 mw captive gas based power plant to meet the requirements of JVSL. "We are looking a vertical integration of the company. We will be setting up a 200 mw power plant, acquire a stake in Australian cola mines to ensure supply of coal and also setup coke ovens at JVSL," Jindal said.
