JSW Steel Unveils Revamping Ideas for BPSL
JSW Steel has chalked out a turnaround plan for its recent buy Bhushan Power & Steel that looks to lower the latter's cost of production and expand capacity
JSW Steel has chalked out a turnaround plan for its recent buy Bhushan Power & Steel that looks to lower the latter's cost of production and expand capacity. JSW Steel’s Jt MD & Group CFO Mr Seshagiri Rao told Moneycontrol that “We have always followed the strategy, turnaround and merge. There are many projects at BPSL that are half completed or need to be taken up. These projects will substantially lower the cost. These include a coke oven plant that is not yet ready. Instead, BPSL buys coke, which is used as a reducing agent in steelmaking, from the market. Also, the plant in Jharsguda doesn't use the pulverized coal injection method, which could otherwise enable use of cheaper coal, instead of coke, bringing down costs.”
Mr Rao added “Also in the works is to expand BPSL's annual capacity from the present 2.5 million tonnes, to 4 million tonnes. This too could be done within the two years’ timeline, after the court order.”
JSW Steel had closed the acquisition of BPSL on March 26, in a move that made it the largest steelmaker in the country. JSW Steel has paid INR 19,350 crore to the financial creditors of BPSL. BPSL has an annual capacity of about 2.5 million tonnes in Jharsguda in Odisha, taking JSW Steel past Tata Steel's India capacity of 19.63 million tonnes a year. JSW Steel's capacity now stands at 20.5 million tonnes a year. BPSL gives JSW Steel a presence in the eastern markets of the country. Till now, its units were present either in the south or west.
The success of the deal itself rides on the ruling by the Apex Court. If the Court does rule against JSW Steel, the company will get back its money from the banks, and hand over the keys of BPSL.