According to Parth Jindal, Managing Director of JSW Cement, the company has deferred its plan for an initial public offering (IPO) by a year as the economic slowdown continues to weigh on its growth strategy. The company plans to use the downturn as an opportunity to expand capacity to 25 million tonnes.
JSW Cement has plans to invest Rs 2,800 crore for additional capacity of 11 million tonnes per annum when the sector is reeling under excess production capacity built-up especially in the southern market.
The company is also planning setting up a clinker plant in UAE with Rs 800 crore to tap western market in India. According to the Managing Director, Parth Jindal, JSW Cement, the freight from Gujarat and Fujairah to Mumbai are same, so decided to do bigger operations overseas with an investment of $110 million (Rs 800 crore). The project will be completed by January end. Currently, the company is importing clinker from different countries and grind it at its Dolvi unit but from February onwards likely to source clinker from its own overseas factory.
JSW Cement plans to invest Rs 2,875 crore to nearly double its manufacturing capacity to 25 million tonnes per annum by FY23 through organic expansion. JSW Cement has an installed capacity of 14 million tonne per annum across west, south and east India. Parth Jindal, managing director of JSW Cement told that the capacity expansion will happen on the back of increased raw material supply from its subsidiary Shiva Cement.
The cement maker had earlier set a target of 20 MTPA manufacturing capacity by 2020, which it is likely to miss due to the ongoing demand slowdown.
Finance minister Nirmala Sitharaman promised more sector-specific steps to boost sagging economic growth and asserted that the 32 measures already initiated by the government have started bearing results.
Looking at the economy with a discerning view, growth may have come down but it is not recession yet, it won’t be recession ever, Sitharaman said.