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JSW Group to invest around Rs 10,000 crore in West Bengal

Economic Times:  January 07, 2016

New Delhi: Sajjan Jindal's JSW Group is looking at investing around Rs 10,000 crore over the next five-seven years at Salboni in West Bengal. This will involve setting up a 1,320 MW coal-based power plant, a 4.8 million tonne cement plant and possibly a paints factory. The projects are due to come up in phases on 4,300 acres that had been acquired by the company for a proposed 10 million tonne steel project in 2007.

The steel project has been in shelved since JSW failed to secure iron-ore linkage. On Wednesday, West Bengal chief minister Mamata Banerjee inaugurated construction of the cement plant, which is seen as boosting the image of the state government, especially with assembly elections due this year. JSW Steel chairman Jindal said JSW Cement will first build a cement plant of 2.4 million tonnes capacity and then double this. "The project would be operational in next one year.

The JSW Group plans to expand it to 4.8 million tonnes in the next 36 months," he said. JSW will also explore the possibility of setting up a paints factory and downstream steel-processing units at the site. Banerjee, who previously led agitations against companies acquiring land for factories, promised all possible help and called for support from local residents. The project is being keenly followed in Salboni, which has little industry. The Jindal steel project announcement had kindled hopes of job creation in 2007.

The cement venture will initially create 250 permanent jobs and another 600 on contract. "West Bengal is likely to emerge as a bastion of the JSW Group," said Parth Jindal, seen as successor to father Sajjan Jindal and tipped to head the group's cement business. "We are drawing up plans to double the capacity of the Salboni plant. This is part of JSW Cement's larger plans to add another 10 metric tonnes of capacity in the next two years at an investment of Rs 2,000 crore. We entered the cement business in 2009 and now have 6 million tonnes of capacity at present, having managed to turn around some of the units."

While the Salboni cement unit's first phase will cost Rs 800 crore, capacity doubling will require anther Rs 700 crore of investment, he said. This is also the first time that a cement plant in the country will be set up using imported clinker from either Vietnam or Thailand. Sajjan Jindal said the group plans to enter into a power purchase agreement with the government for the 2 x 660 MW power plant at Salboni that entails an investment of Rs 8,000 crore. He said getting into paints would be a logical move.

"We consume a lot of paints inhouse for producing colour-coated steel sheets. Since we make steel and cement which goes into building homes we are also considering the option of entering paints business." The group is keeping its options open on whether to acquire an existing paints business or launch its own from scratch, Jindal said at a press conference.

The group is also looking at the possibility of setting up downstream steel-processing units at a later stage, he said. While ruing the fact that his dream steel project has got stuck due to lack of raw material support, Jindal struck a practical note regarding its future. "The steel project is in cold storage," he said, adding that the present status of the industry did not look promising for a new plant, in addition to the group's plans for growing at existing sites such as Dolvi and Vijaynagar. "But I am an optimist. In future, if there is any greenfield steel unit that we set up, it will be at Salboni."

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

x IBEF : India Brand Equity Foundation