Mumbai: The JSW Group will invest up to $500 million more in its steel pipes and plates facility in Texas, helping it achieve the full 1-million tonne installed capacity of the plant it had bought in 2007 and stop sourcing raw steel from Latin America and India.
The JSW group had bought the then bankrupt Baytown steel asset for $810 million in October 2007, and is operating at just about 30 percent or 3 lakh tonne now.
Since the acquisition, JSW has invested around $220 million in working capital and incurred $170 million in losses, taking its total exposure to the facility to $1.2 billion, JSW Group chairman Sajjan Jindal said here on Monday.
“The Jindals’ investment will go into backward integration and also to create the first melt and manufacture contiguous plates and pipes facility in Texas,” Texas governor Gregory Abbott said while signing the investment pact.
Junior Jindal, Parth, who is also a director at the Group and also heads the US operations of JSW Steel, was quick to add the plant since then has almost turned around with cash profit of $180 million last year and expressed optimism that it will turn around fully by 2020.
The plant will serve the oil and gas rich Texas, which is the second largest American state and also the largest exporter from the world’s largest economy, Abbott said. He said the investment over the next two years will create 500 new jobs. The plant already employs 350 people.
Junior Jindal said currently the plant, which runs at 30 percent of the installed 1-million tonne capacity, sources steel from Brazil, Mexico and India, which will stop completely once the new facility is commissioned as it will sourcing raw steel from within Texas/US itself.
“From India alone, we have been importing 1.5 lakh tonne of raw steel plates. This will come to an end by October 2020 when the second phase of expansion is complete. The first phase will be over by March 2019,” Parth Jindal said
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Updated Date: Mar 27, 2018 09:37:37 IST