As JSW Steel pushes ahead with an ambitious capacity expansion roadmap, the company is balancing growth with cost controls, technology adoption and supply-chain resilience amid geopolitical disruptions. Jayant Acharya, Joint Managing Director and CEO, talks to Urvi Malvania on demand trends, West Asia crisis impact and adopting AI to further efficiencies on the factory floor. Excerpts.
Q1. Can you explain the roadmap to reach 62 million tonnes of capacity by FY32 and the capex required over the next few years?
A: Expansions at Vijayanagar and Dolvi will add 7 million tonnes by September 2027, taking capacity to 37 million tonnes. Further expansion projects, including the Salav brownfield low-carbon steel plant, will take capacity to 62 million tonnes.
The good thing is that all these are existing sites. We are not hunting for land or waiting for clearances, which helps in faster execution. Today, speed is cost. Delays increase costs. We can execute at much lower specific investment costs than others, which makes us more competitive.
Q2. How do partnerships like the JFE and POSCO JVs help JSW Steel in terms of costs and operational acceleration?
A: The broader logic behind these strategic JVs is that they are among the best steel players globally with strong technologies. More importantly, it creates a “double engine” of growth. If we expand only on our own, the balance sheet limits the pace. With JVs growing in parallel, the pace of growth becomes much faster.
Q3. Where is the confidence on steel demand coming from despite concerns around fuel prices and consumption moderation?
A: Before Covid, steel demand in India was around 100 million tonnes. Despite the pandemic, geopolitical conflicts and trade disruptions since then, India ended the last fiscal year with 164 million tonnes of steel demand.
Demand is increasing by around 12–15 million tonnes annually, creating nearly 100 million tonnes of additional demand over seven years. If capacity is not built during difficult periods, the country risks dependence on imports. India’s long-term growth trajectory remains intact, supported by early signs of private-sector capex revival in automobiles, renewable energy and infrastructure.
Q4. Has the West Asia crisis and recent fuel price hikes affected operations, costs or demand?
A: The West Asia crisis has mainly impacted limestone sourcing, with shipping delays and higher costs forcing us to diversify sourcing to other regions. There has also been some impact on gas and LPG availability, though our dependence on LPG and gas-based production is limited.
Initially, we had to recalibrate sourcing by blending domestic limestone with imported grades and diversifying supply chains to other Asian countries. Gas and LPG availability later improved, so while there is a cost impact, there is no major availability issue currently.
Separately, higher fuel prices are increasing transportation, logistics and vendor input costs. Coking coal prices, iron ore costs and rupee depreciation have also added to cost pressures in Q1. We are trying to mitigate these impacts, and the stronger pricing environment from Q4 carrying into Q1 should help offset some of the pressure.
Q5. What role has safeguard duty played in helping sustain pricing ?
A: Steel prices in the December quarter were at five-to-six-year lows and were not sustainable. Prices corrected upward during the seasonally stronger January–March quarter.
The safeguard duty announced at the end of December was a confidence-building measure for the industry. It gives long-term visibility and protects against unfair trade and dumping, especially since India vulnerable to trade flow diversions. The safeguard duty gives a three-year runway for the industry to invest confidently.
Q6. What are the major structural cost takeout measures underway at JSW Steel?
A: One major lever has been shifting to larger blast furnaces and integrated facilities, which improve fuel efficiency, manpower productivity and overall operations.
The second lever is energy efficiency, where we recycle waste gases for plant operations and power generation, reducing coal consumption and emissions.
Q7. How is JSW Steel applying AI digitalisation in its operations?
A: We currently have over 18,000 sensors across our plants, and that number will likely double going forward. This has significantly improved plant asset reliability.
We are also using AI for safety through computer vision and to improve customer-side deliverables. Beyond AI, technologies like dehumidification and oxygen lancing are helping reduce coke consumption and improve overall cost structures.
Q8. How is CBAM affecting JSW Steel and what mitigation measures are being taken?
A: Around 90% of our sales are domestic, limiting our dependence on exports. However, to address CBAM-related challenges, the Salav plant will manufacture low-carbon steel for European markets. Till the Salav unit comes up, we are using emissions banking and certification schemes available in Europe.
Q9. Is JSW Steel exploring more partnerships or acquisitions?
Jayant Acharya: We are not actively exploring major partnerships currently, having already partnered with JFE and POSCO. On acquisitions, we remain open to opportunities but continue to focus primarily on low-cost brownfield expansion.