JSW Steel is planning a capital expenditure of Rs 5,845 crore for the capacity expansion at its Vijaynagar and Nashik plants. The company is planning capex jointly with the Japanese steel company JFE Steel.
JSW Steel and JFE Steel had formed a joint venture for the production of Grain Oriented Electrical Steel (GOES), which is mainly used in power distribution, power transformation and large electric motors.
Why is it important?
JSW Steel’s capex in Grain Oriented Electrical Steel production holds strategic importance for the company, as India is heavily dependent on imports for GOES. In FY24, India’s total GOES requirement was about 4,00,000 tonnes; however, the domestic GOES production in the year stood at about 50,000 tonnes.
India’s total GOES import in FY24 stood at 2,39,000 tonnes, leaving an unfulfilled requirement for the speciality steel. According to GTRI, a think tank, India is facing a 30 per cent shortage of GOES/CRGO steel, which is essential for electric motors, power transmission and transformers.
JSW Steel expansion plans
Amid India’s renewable energy push, GOES demand is going to see a further pickup. Looking at the ever-increasing demand and current shortage, JSW Steel, through its JV with JFE Steel, has increased its production target. The company has revised its earlier production target of 62,000 tonnes per annum to 1,00,000 tonnes per annum at its Vijaynagar plant.
Jayant Acharya, Joint Managing Director and CEO of JSW Steel, said, “India’s green energy transformation, decarbonization and digital infrastructure development are triggering large demand for high-grade electrical steel.”
Acharya added that the company’s GOES investment is a critical step in enabling import substitution, supporting India’s energy transition goals, and delivering high-efficiency electrical steel solutions to the domestic and global markets.
Similarly to the Vijaynagar plant, JSW Steel has five-fold increased its production target at the Nashik plant. The company has revised the production target from 50,000 tonnes per annum to 2,50,000 tonnes per annum. The two production facilities of JSW Steel, through the JV with JFE Steel, are scheduled to be commissioned in FY 2028.