JSW Steel partially leaves Italy and plans to keep the railway plant

Contrary to the previous plan, JSW Steel, led by Sajjan Jindal, decided not to leave the struggling Italian market altogether, but to keep the railway plant even while selling other assets in this country.

Seshagiri Rao, co-general manager of JSW Steel, said Activity area that the company is looking for a good opportunity to partially divest the Italian asset.

“We are going to keep the railway factory and want to get out of other companies. We have received initial interest from buyers, but we will take a call after reviewing it thoroughly,” he added.

The Italian operation needs upstream integration to make it sustainable. JSW Steel does not want to invest further there to install an electric arc furnace and produce billets to power the units there, Rao said.

Regarding the railway plant, he said that it can be integrated by supplying billets from India. Other mills in this country are not generating this kind of Ebitda to support shipments of specialty billets from India, he said.

In 2018, JSW Steel had acquired the entire equity of the Italian companies – Aferpi SpA and Piombino Logistics SpA – and 69% of GSI Lucchini SpA for €55 million (₹440 crore).

Aferpi has an annual capacity of 0.32 million tons rail mill, 0.4 mt rod mill and 0.6 mt wire rod. Piombino Logistics, which manages the logistics infrastructure of the port of Piombino, also operates a 42 km railway line inside the factory. GSI Lucchini manufactures forged steel balls used in crushers.

To invest ₹450 cr in group companies

JSW Steel, which had come under fire for investing in unlisted group companies JSW Energy and JSW Paints, will invest ₹450 crore this financial year.

Last year, it pledged to invest Rs 750 crore over 3 years to help JSW Paints expand its industrial paint capacity and secure committed supply.

So far, Rao said the company has invested Rs300 crore in JSW Paints and the valuation of this investment has already risen to ₹554 crore. The company will invest 225 crore more this year and rest next year, he added.

Rao said the demand for colored coated products is doing well and JSW Steel has a 60% market share in this category.

The company had also agreed to invest ₹450 crore in JSW Energy to develop 958 MW green power project in 40:60 ratio of solar to wind power at Vijayanagar plant in Karnataka. He has already invested ₹225 crore and the remaining money will be invested this year.

JSW Energy has commissioned 225 MW of green power capacity and the remaining 733 MW will be commissioned this year, Rao said.

Published on

July 24, 2022