Sajjan Jindal, vice-chairman and managing director JSW Steel, said the potential market for the finishing facilities are the US and Europe. Over a period of time, steel-making in these regions would close down and the company is eyeing a takeover of such units, Jindal added.
The JSW strategy is to have only the basic steel-making facilities, like slabs and billets, in India, while facilities for value-added products with higher margins would be in the US and Europe.
Seshagiri Rao, director, finance, JSW Steel, explained the demand for value-added products in India had not evolved to the extent of that of the developed countries.
For instance, galvanised steel production in India is to the tune of 5 mt with the demand around 2 mt.
Rao said the company was evaluating some proposals for acquisitions, but had not zeroed in on any particular unit.
Alternatively, JSW would look at setting up finishing facilities in India and
then export. In that case, the steel major could examine seeking special economic zone status for the purpose.
The company is adding 1 mt of value-added capacity, estimated to cost Rs 1,000 crore (Rs 10 billion).
The project would be commissioned by May 2007, following which 50 per cent of JSW Steel's 4 mt capacity would be value-added steel. JSW sells its galvanised products under the brand name Galvplus.
JSW Steel has lined up major expansion plans. The company has already achieved financial closure for capacity expansion up to 7 mt at its existing facilities.
JSW has signed a memorandum of understanding with the Jharkhand government for setting up a 10 mt plant, which would depend on raw material linkages.
JSW Steel is a fully integrated steel plant having units across Karnataka and Maharashtra, producing a wide range of products from pellets to colour-coated steel.
Rao pointed out that with basic raw material prices peaking, only the projects of integrated players would be viable.
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