MUMBAI: Although global growth expectations have eased recently, structural demand drivers for commodities like steel remain intact, Sajjan Jindal, chairman and managing director of JSW Steel Ltd, said in a message to shareholders in the company’s annual report.
“The past financial year was a mixed bag, with most major economies recovering from the negative effects of COVID-19. However, volatility in prices, rising energy prices, supply chain challenges and geopolitical conflicts have made the recovery increasingly fragile,” Jindal said in his message.
JSW Steel gives highest ever EBITAVOFF 39,007 crore and profit 20,938 crore in FY22. Its total debt-to-Ebitda, on a consolidated basis, is comfortable 1.45 times. Ebitda is earnings before interest, taxes, depreciation and amortization.
Jindal said steel consumption will grow at a healthy rate and recent government measures such as export duty on steel are only a short-term headwind. industry.
“The future of the Indian steel industry is exciting with the ever-growing domestic market. During FY 2021-22, Indian steel consumption increased to 106 million tonnes from the pre-pandemic level of 100 million tonnes. Demand is expected to grow at a healthy rate during the current decade. We see the export duties imposed on steel in May 2022 as a short-term headwind, as they are aimed at containing inflation. Jindal said, “We continue to hold talks with the government on this matter and believe that the duty will be withdrawn once inflation subsides.”
Jindal said India is a cost-competitive exporter of steel, and has an opportunity to play a bigger role in the global steel trade. “We are expanding our India capacity from 27 MTPA to 37 MTPA in a phased manner to take advantage of opportunities in domestic and global markets,” he said.
JSW Steel is expanding its Vijayanagar plant from 12 MTPA to 19.5 MTPA, while Bhushan Power & Steel is expanding to 5 MTPA. It has recently completed 5 MTPA expansion of its Dolvi facility.
Jindal also highlighted the company’s efforts to reduce carbon emissions and other efforts on the ESG front. In the last fiscal, JSW Steel raised $500 million through a Sustainability Linked Bond (SLB), the first such issue by an Indian steelmaker.
“The US$500 million SLB has a tenure of 10.5 years and is aligned with our CO2 reduction target. We have committed to reduce our CO2 emission intensity (Scope 1 and 2) by 42% by 2030 from the base year of 2005, in line with India’s nationally determined contribution.”
He said that JSW Steel has determined 10,000 crore for investment to reduce its carbon emissions through various initiatives, such as increasing the use of renewable energy to replace thermal power, reducing fuel rates through better raw material quality , and deployment of new technology.