The Hindu reported that JSW Steel Ltd proposes to reduce its capital expenditure by over half for the current fiscal and go slow with its capacity expansion in the backdrop of sluggish demand for steel and huge debt burden of over INR 18,400 crore.

The report quoted an official as saying that “JSW Steel had initially planned a capital expenditure of about INR 8,000 crore for the current financial year. The company has spent about INR 2,000 crore in the first half of the fiscal and is likely to reduce the capital expenditure by over half for 2011-12.”

The official said “Investments in capacity expansion look doubtful in the current scenario.”

As per report, JSW Steel, which operates a 10.3 million tonne per annum plant at Vijaynagar in Bellary, had planned to increase its capacity by 2 million tonnes by 2014 but now, the company proposes to defer the investments of INR 2,500 crore planned for the expansion of Bellary unit and also its Salem plant.

Similarly, it also plans to defer the investments in expanding the capacity of subsidiary JSW Ispat, which it had planned to increase by 1 million tonne in 2013.

JSW Steel, which proposes to build a 10 million tonne integrated steel plant in phases at Salboni in West Bengal with an investment of INR 35,000 crore, might go ahead with the planned soft launch of the project in January. However, it may go slow with the investments in the current environment.

(Sourced from thehindu.co.in)