The Hindu Business Line : JSW Steel to set up $42-m greenfield project in Georgia

Expansion mode: Dr S.K. Gupta, Director, JSW Steel Ltd, with Mr Seshagiri Rao, Director Finance, at the company’s annual general meeting in Mumbai on Monday.

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Mumbai, June 16 JSW Steel will set up a 1.75-lakh tonne steel plant in Georgia. It has formed a 49:51 per cent joint venture with an UK-based company for the $42-million plant and will invest about $7 million.

The debt-equity ratio will be 2:1 and the European Bank for Reconstruction and Development has come forward to fund 50 per cent of the debt portion of $28 million, said Mr Seshagiri Rao, Director (Finance), on the sidelines of the 14th annual general meeting here on Monday.

Mr Rao said hydro-power came cheap in Georgia and the greenfield project would have an electric furnace. Georgia was also a major exporter of scrap, an input for electric furnaces. The project was expected to become operational in 2008-09 and would cater to the local market there. The local demand was in the range of 0.5 million tonnes, he said.

Chile investment

On shareholder queries relating to investment in Chile for iron ore mining, he said the mines would become operational in about 18 months and the production would be sold locally. The venture was more a sort of hedging the company had resorted to as it sourced its iron ore requirements in the domestic market.

Dr S.K. Gupta, Director, who chaired the meeting, said that in the last 18 months the company has made massive investments on acquisitions and expansion projects of about Rs 10,500 crore. The benefits of the investment would flow from this year and by 2010 the company would invest another Rs 14,000 crore in various projects. Mr Rao said about Rs 8,000 crore debt for this had been tied up.

JSW Steel has planned to enhance it capacity from 4.8 mpta to 32mpta by 2020, besides aiming to achieve self sufficiency in coking coal and iron ore. With the current expansion programme, the company will achieve 7.8 million tonne capacity by December 2008.