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Metals
JSW Steel
We hosted the management of JSW Steel at our DB Access India conference. We highlight
the key points from our meeting with the management:
Brownfield expansion on track to be commissioned by Mar’11 end
The management was quite confident of completing the undergoing brownfield capacity
expansion by Mar’11 end. The management maintains its guidance of saleable steel sales of
9mn tonnes in FY12 and 9.5mn tonnes in FY13 (ex-Ispat). The ramp up at Ispat is also
progressing well with Ispat achieving a capacity utilization of ~85% in Jan’11.
Debottlenecking at Karnataka and West Bengal expansion to drive future volume
growth
JSW Steel remains upbeat about its 2mn tonne debottlenecking project at Vijayanagar,
Karnataka and greenfield steel project in West Bengal. With majority of the land for the
implementation of West Bengal plant already under possession, the work on the West
Bengal project is likely to gain momentum in 2Q’FY12.
Turnaround at Ispat and raw material integration remain key focus areas
The management aims to achieve an EBITDA/tonne of US$80-100/tonne at the recently
acquired Ispat Industries in the short to medium term and ramping it up eventually to
~US$140-150/tonne as the investments in new facilities at Ispat (power plant, pallet plant,
coke oven plant) bring down the cost of production at these facilities. The financial
restructuring process is also on and should be fully completed by Sep’11. Further, JSW Steel
remains confident of achieving its target of shipping ~1mn tonnes of iron ore (70% stake)
from its iron ore operations in Chile and ~1mn tonnes from its coking coal operations in US,
which are likely to lead to significant cost savings and help it to sustain its EBITDA/tonne at
US$170/tonne levels, despite raw material headwinds.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Metals
JSW Steel
We hosted the management of JSW Steel at our DB Access India conference. We highlight
the key points from our meeting with the management:
Brownfield expansion on track to be commissioned by Mar’11 end
The management was quite confident of completing the undergoing brownfield capacity
expansion by Mar’11 end. The management maintains its guidance of saleable steel sales of
9mn tonnes in FY12 and 9.5mn tonnes in FY13 (ex-Ispat). The ramp up at Ispat is also
progressing well with Ispat achieving a capacity utilization of ~85% in Jan’11.
Debottlenecking at Karnataka and West Bengal expansion to drive future volume
growth
JSW Steel remains upbeat about its 2mn tonne debottlenecking project at Vijayanagar,
Karnataka and greenfield steel project in West Bengal. With majority of the land for the
implementation of West Bengal plant already under possession, the work on the West
Bengal project is likely to gain momentum in 2Q’FY12.
Turnaround at Ispat and raw material integration remain key focus areas
The management aims to achieve an EBITDA/tonne of US$80-100/tonne at the recently
acquired Ispat Industries in the short to medium term and ramping it up eventually to
~US$140-150/tonne as the investments in new facilities at Ispat (power plant, pallet plant,
coke oven plant) bring down the cost of production at these facilities. The financial
restructuring process is also on and should be fully completed by Sep’11. Further, JSW Steel
remains confident of achieving its target of shipping ~1mn tonnes of iron ore (70% stake)
from its iron ore operations in Chile and ~1mn tonnes from its coking coal operations in US,
which are likely to lead to significant cost savings and help it to sustain its EBITDA/tonne at
US$170/tonne levels, despite raw material headwinds.
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