BS reported that JSW Steel has finalised a INR 2,140 crore investment plan in its subsidiary JSW Ispat Steel Ltd to set up a coke oven, a pellet plant and a cold rolling mill.

The investments will be made through a special purpose vehicle, Amba River Coke Ltd a wholly owned subsidiary of JSW Steel. The projects will come up at JSW Ispat’s Dolvi unit (in Maharashtra’s Raigad district) and are part of a strategy to make the unit cost effective.

JSW Steel said that “The coke oven and pellet plants will improve profitability and the cold rolled mill will increase the share of value added products from 10% to 25 to 30%.”

The coke oven battery would have a capacity of a million tonnes per annum and would cost the company INR 975 crore. Of this, INR 375 crore would be the equity component, the rest coming from loans. ARCL has the environmental clearance and the plant is expected to come on stream by the end of calendar year 2013.

The proposed four million tonnes pellet plant at the site is estimated to cost INR 835 crore and a 0.8 million tonne per annum cold rolled mill INR 330 crore. These two projects are to be financed through a debt equity ratio of 2:1. JSW said that “These projects will be taken up for implementation on receipt of requisite clearances and commissioned in FY13-14.”

These three projects are integral to the turnaround effort at JSW Ispat. JSW Steel had said these projects were priority, to get Ispat on its feet. Experts believe backward integration will solve Ispat’s profitability issues. An analyst, on condition of anonymity, said that “The company has reiterated time and again that Ispat’s Dolvi unit is one of the most technologically advanced in the country. However, lack of coke oven battery, pellet and power plant has made sure the company suffers losses.”

(Sourced from BS)