JSW steel is the 2nd largest Steel Producer in India. In 2022-23 Q4, it reported revenues of Rs 46,962 crore. Its production capacity is growing at an annual growth rate of 7% to 8%. As on 2023, JSW Steel has reached Utilization Capacity of 96%. By 2030, JSW Steel Would like to make its Capacity to 50 Million tons of steel from its current capacity of 27 million tons. This specific case study discusses JSW Steel Procurements, Expansion Strategies, Diversification Strategies, and Environmental Sustainability Strategies.
Procurements and Sourcing: As on June 2023, JSW Steel was announced as the “Preferred Bidder” for two of the Iron Ore Mineral Blocks in Goa. Measures are Underway to Prepare the Mines Lease Agreement to JSW Steel. As on 2023, JSW Steel is achieving 8% Year-on-Year Growth rate in Sales. These two Iron Ore Mineral Blocks in Goa have the Iron Ore Resources worth 74 million Metric Tons.
Expansion Through Mergers & Acquisitions: As on May 22, 2023,JSW Steelis to acquire National Steel and Agro for a cash transaction of Rs 621 crore. National Steel and Agro Industries has an annual revenue of Rs 815 crore for FY2021-22. The specific Products of National Steel and Agro Industries include Cold Rolled Coils, Galvonised Corrugated Sheets, Colour Coils and Pre-Painted Profile Sheets. This acquisition will strengthen the JSW Steel Operations, Procurements, Marketing and Sales. Earlier JSW Steel acquired Bhushan Power and Steel, Monnet Ispat and Energy through the bankruptcy route. Over a Period of time, JSW Steel is identifying troubled businesses, and adding them to their portfolio and transforming them; in order to strengthen their capacity. These acquisitions make JSW Steel capacity to reach 27 million tons of steel; next to Tata Steel having capacity of 34 million tons of crude steel production.
Environmentally Compliant Production: As on June 07, 2023, JSW Steel Successfully injected waste plastic into one of the blast furnaces of its Vijayanagar Steel plant; making it a socially responsible, environmentally compliant company reducing Carbon footprint. With this JSW could achieve its goal of reducing emissions/footprints from its production, and remain committed to sustainable practices. On this accomplishment, JSW Steel said “the break through aligns with our vision of being a responsible corporate citizen, and underscores our commitment to sustainable practices”. Waste Plastic injection also utilized the “Reuse/Recyle” Concept in Manufacturing.
Environmental Standardization: Meanwhile as on May 31, 2023, JSW Steel could get CII Green Pro Ecolabel Certification for its “Automotive Steel Products”. It indicates the highest standards of Environmental Sustainability in Manufacturing Industry. This Green Pro Certification Considered Their Vijayanagar Automotive Steel Plant’s Product Life Cycle, Raw Material Sourcing, Production Processes, Energy Consumption, and Product Management.
Diversification and Expansion Strategies: By 2026,JSW Group is Planning to have 10% market share in Paints industry in India. The main triggers for this expansion are the Growing demand in the Market for Steel and Paints. This diversification and expansion plan is in-line with their vision of becoming a Prominent Player in Indian Infrastructure Industry. In June 2023, JSW also expressed their intention to Acquire Public Sector Company Such as NMDC Steel, if it comes up for disinvestment.
Going Further: As on June 07, 2023, JSW Group announced that it is going to invest $25 billion over a period of 7 years. JSW Steel would like to increase its capacity to 50 million tons by 2030; from its current capacity of 27 million tons of steel production. Going Further, JSW Steel Would like to make brownfield and green field expansions rather than typical business acquisitions.
This indicates the ambitious investment plans and business diversification of JSW to make a mark in Indian Infrastructure Industry.
Thank You.
Dr.Goparaju Purna Sudhakar
References:
- Bhan, S. (2023), “JSW Steel Keen on Big PSU Acquisition, says NMDC Steel a Good Bet”, CNBCTV18, June 07, 2023.
- BLMB (2023), “Certification, JSW Steel gets CII Green Pro Ecolabel”, Business Line, May 31, 2023.
- CNBCTV18 (2023), “JSW Group aims to surpass 50 million tonnes in Steel Capacity by 2030”, CNBCTV18.com, June 07, 2023.
- ETB (2023), “JSW Steel to Acquire National Steel and Agro for Rs 621 crore”, The Economic Tines, May 22, 2023.
- Hill, C. (2023), ,”JW Steel Successfully Completes Waste Plastic Injection Trials”, Steel Times International, June 07, 2023.
- Krishna, T. (2023), “JSW Steel Announces Selection as “Preferred Bidder” of Mining Base for Iron Ore in Goa”, The Financial Express, June 13, 2023.
- MCN (2023), “JSW Steel Emerges as ‘Preferred Bidder’ of Mining Lease for Iron Ore in Two Goa Blocks”, MoneyControl.com News, June 12, 2023.