JSW Cement to sets its sights on IPO and green cement leadership
This week, we look at JSW Cement's plans for the future as it attracts interest from investors, intends to expand its domestic cement capacity and make an entry into India's ready-mix sector.
JSW Cement is positioning itself closer to being listed on the bourses as preparations continue to move towards an initial public offering (IPO). It is now starting to dilute minority private equity stakes in the company to a selection of investors.
JSW Cement is estimated to be worth in the region of US$2bn and is likely to hold the IPO in December 2022. Synergy Metals Investments, a Dubai-based investment company, has sought clearance from the Competition Commission of India for clearance to acquire minority funds in the company.
Fast-track growth
JSW Cement already has manufacturing units in Vijayanagar in Karnataka, Nandyal in Andhra Pradesh, Salboni in West Bengal, Jaipur in Odisha, Dolvi in Maharashtra, as well as a clinker plant in Fujairah, UAE. It also acquired Shiva Cement in 2017.
Through this the company raised its cement capacity to 14Mta but has plans to further expand its cement capacity to 25Mta by 2025, while also being the leading green cement producer in the country by using blastfurnace slag to produce Portland slag cement and ground granulated blastfurnace slag (GGBS). In recent weeks, it also decided to integrate its circular economy efforts across its steel and cement businesses.
The company ended last year by announcing it will be investing more than INR15bn (US$201.1m) in a new 1.36Mta (4000tpd) clinker plant for its Shiva Cement subsidiary, which will be built by thyssenkrupp Industrial Solutions in Sundergarh district, Odisha. Larsen & Toubro has been awarded the civil, mechanical and refractory erection work, while Thermax will supply the WHR boilers and the turbines will be built by Siemens. The project will include a 1Mta grinding unit, 8MW WHR plant and 4Mta crushing plants at its dolomite and limestone mines, a 10km overland belt conveyor and a 12km railway track to Sagra station.
Once commissioned, the Shiva Cement Odisha clinker unit will act as a hub to service JSW Cement's manufacturing facilities across the eastern region of India. Parth Jindal, managing director of JSW Cement Ltd, said: "Shiva Cement’s plan to establish a new clinker unit further reaffirms our group's commitment to investments in the state. Through this investment we hope to contribute to the overall economic development of Odisha as well as create new direct and indirect job opportunities. The new clinker unit at Shiva Cement in Odisha will provide a strategic advantage to service the needs of our customers in the region and further strengthen JSW Cement's leadership position in the green cement category in India. We expect to commission the clinker unit by the end of next fiscal."
JSW Cement also has plans for expansion in Kochi, Kerala, and Chennai, Tamil Nadu, where it will build 0.45Mta grinding plants.
Downstream investments
As part of JSW Cement's vision of being a pioneer in green cement, the JSW Group is developing construction chemicals and has entered the ready-mix concrete market with its first commercial unit in Chembur, Mumbai. The company will use its Indian Green Building Certified (IGBC) product as well as GGBS and other raw materials close to its ready-mix plant under the JSW Concrete brand. The next step will be to expand the ready-mix business into the south and western regions of India.
Embracing digitalisation
A further area of activity is the group's increasing investment in digitalisation. McKinsey is providing consulting services for this transition. The digitalised sales and marketing operations have been rejuvenated by partnering with Yalochat to provide customers with a conversational e-commerce service for business transactions at any time. JSW Cement already has digitalised its outbound marketing functions with MobileTech, an AI-based tool that enables the sales force to interact with channel partners and receive orders.
Summary
JSW Cement has set its stall out to be India's top green cement producer. It has a tight schedule to increase its cement capacity over the next four years by nearly 50 per cent. If it can persuade potential investors that it achieve this, as well as develop its ready-mix business to increase its customer base and further improve its efficiency through digitalisation, it is expected to receive plenty of interest for its IPO at the end of next year.
