JSW Steel has added a feather to its cap by commissioning its Cold Rolling Mill (CRM)-2 at Vijayanagar Plant in Toranagallu. The plant will have an installed capacity of 2.3 MnT pa for auto grade steel products. The company plans to supply its auto grade steel products from this plant to different automobile manufacturers present across India.
JSW Steel, one of the largest steel manufacturers, has an installed capacity of 14.3 MnT pa. Its plant in Vijayanagar has a HR Coil manufacturing capacity of 8.2 MnT pa, whereas the CR capacity was around 1.8 MnT pa. The company had formed a JV with JFE Steel to manufacture auto grade steel at a cheaper price in India.
Talking to SteelMint, a spokesperson from JSW said, [su_quote]The plant is strategically located in the southern region and will be able to feed the major auto hubs in southern & western region. We will be able to supply to the markets in Chennai, Bangalore & Pune. We are expecting the demand from auto sector to be quite strong in the upcoming quarters.[/su_quote]
Industry experts believe that the competition in the CRC segment is going to heat up due to expansion in capacities by other manufacturers as well. Automobile manufacturers are now looking for domestic substitutes in order to be more ‘price competitive’. The company claims, production of auto grade steel domestically will bring down the cost of production for auto manufacturers. But, when asked about the pricing about these products, the official reserved his comments. He said,
“It’s quite premature to talk on pricing at present, the product rolled out from the new CR Mill will be on trial for some time and we will take a decision on pricing subsequently.”
Logistics Advantage
JSW’s plant in Vijayanagar is quite strategically located in order to feed the needs of states like Karnataka, Tamil Nadu & Maharashtra. Currently, the plant’s Hot Rolling capacity stands at 8.2MnT pa, whereas the Cold Rolling Capacity stands at 2.3MnT pa. As per sources, the company expects to meet around 15 % of total demand from automobiles sector.
Some market participants believe that the plant production commences at a time when, Chennai has announced to set up an Auto City. JSW supplied steel for auto components manufacturing from its plant in Salem. With the commencement of this plant, it will be able to supply steel for manufacturing of outer panels. Players like Tata, Essar, Bhushan & SAIL have also shown interest in increasing their supply to the auto and the auto ancillary industries.
Recently, Renault Nissan has announced to increase its capacity in its Chennai plant to 4.8 lakh units per year. It is a good opportunity for the domestic steel manufacturers. Experts view that as the economy reverts back from a slump, the auto sector will provide a good opportunity for Flat steel manufacturers. Domestic manufacturers will soon be able to cash in the benefits from the growth of automobile market in India.
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