JSW Steel has a long-term goal of achieving a capacity of 40-45 mt through a mix of brownfield and greenfield projects. The greenfield plan involves setting up a 12 mt plant in Odisha.
Asked whether the company could take recourse to the tax incentive for the greenfield project, Rao said, “Odisha is there but over and above that, we have brownfield expansion that can be done in separate SPVs.”
In a bid to revive investment, the government announced last month that new manufacturing firms established after October 1, 2019 are eligible for a base corporate tax rate of 15 per cent (effective tax of around 17 per cent) if they make fresh investments in manufacturing by March 31, 2023 and are not claiming incentives.
JSW is in the process of a massive organic expansion that involves spending of Rs 48,700 crore over 2018-2022 financial years to expand capacity from 18 mt to 24 mt. Its brownfield expansion plans include increasing capacity at Vijaynagar to 18 mt.
At present, an increase from 12 mt to 13 mt has already been announced.
Rao, however, said the expansion from 12 mt to 13 mt had been put on hold. “We have put it on hold right now as we have to lose production for 90 days during that time. Once Dolvi starts, we will take it up,” he said.
Dolvi is in the process of expanding capacity from 5 mt to 10 mt, which is expected to be completed by March 2020.
The other expansion plans on the anvil could include taking capacity at Salem from 1.1 mt to 2 mt.
According to Rao, Salem beyond 1 mt and Dolvi beyond 10 mt could be considered under the new model. “For these brownfield projects, we have the option of doing it under separate SPVs in the future,” Rao said.
JSW has also bagged assets under the Insolvency and Bankruptcy Code (IBC). The resolution plan for Bhushan Power & Steel has already got an approval from the National Company Law Tribunal (NCLT). JSW Steel, however, has filed an appeal against the order for not being granted certain reliefs.
It has also jointly with AION won Monnet Ispat & Energy. Each of these acquisitions also has expansion plans.