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Vedanta Planning to Expand Steel Capacity in India

Steel News - Published on Tue, 20 Aug 2019

Image Source: Business Today
Financial Express reported that after its foray into the steel business, Vedanta has set its sights on being among the top three-four steel makers in India, planning to expand its steel capacity to 10 million tonne per annum from the present 1.5 million tonne per annum in the next five to six years. The natural resources major acquired Electrosteel Steels, a primary producer of steel and downstream value-added products, for INR 5,320 crore in June last year. ESL has a greenfield steel plant with a capacity of 1.5 million tonne per annum near Bokaro in Jharkhand state. The production ramp-up plan would entail ESL’s capacity being doubled to 3 MTPA in the next two years, with an investment of around INR 4,000 crore to INR 5,000 crore. The second phase of the plan may see the capacity of the Jharkhand plant being upped to 6 million tonne per annum. To further increase capacity to 10 million tonne per annum, the group could go for greenfield projects or acquisitions. For greenfield projects, sites in West Bengal and South India are on the company’s radar.

Shortly after acquiring ESL, Vedanta announced capacity expansion of the Bokaro plant in phases, with an investment of USD 3 billion to USD 4 billion. But ESL needed to make a turnaround before any capacity expansion could take place. And this was achieved through operational and commercial initiatives and rebranding of products. The company posted an Ebitda of USD 130 per tonne to USD 140 per tonne at the end of the last fiscal, as against USD 65 per tonne at the time of the acquisition. Production stood at around 1.2 million tonne at the end of FY2018-19, posting 17% YoY growth. Focussing on a more profitable product mix, the steel maker has recently launched a rebranded steel portfolio that includes TMT bars, wire rods, ductile iron pipes, billets and pig irons.

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Posted By : Sanju Moirangthem on Tue, 20 Aug 2019
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