JSW Steel ramps up tinplate production, takes on Tata Steel

Mumbai: JSW Steel, India’s second largest private steel manufacturer, has redoubled efforts to boost tinplate manufacturing. The company said it has invested close to ?1,000 crore at its Tarapur unit in Maharashtra to roll out JSW Platina, premium tinplate, to tap the growing demand from the local packaging industry.

The investment is part of the group’s ongoing ?45,000 crore capital expenditure programme.

“The demand for tinplate in India is at about 700,000 tonnes today,” Jayant Acharya, director – Commercial, Marketing & Strategy, JSW Steel said. “It’s growing at 6.5% per year and I think this will rise as alternative packaging picks up. India has about 1 million tonne of installed capacity but less than half of it is operational. India imports about 300,000 tonnes a year, but 55-60% of this is secondary material that doesn’t qualify for use in the developed world. “

“For the first line at Tarapur, we’ve set up 250,000 tonne capacity with an investment of ?575 crore,” Acharya added. “In the second line, we’re adding another 250,000 tonnes with an investment of ?490 crore. We expect the product to deliver better margins than general operations.” Once both lines are operational, JSW Steel will have installed tinplate capacity of 600,000 tonnes, including an existing 100,000 tonnes as part of a joint venture with Vallabh Tinplate in Punjab, called JSW Vallabh Tinplate Pvt Ltd. They will overtake Tata Steel as the largest tinplate manufacturer in India, with an existing capacity of 380,000 tonnes a year.

Domestic tinplate production has been growing so far at compound average growth rate of 7.4% since FY10, while demand over the same period has grown at 6.4%. Tinplate is used for packaging in the consumables industry for edible oil and fruit pulp, as beverage cans, and in cans for paint and solvent, as a replacement for plastic.

The domestic market for tinplate is estimated to be approximately ?5,500 to 6,000 crore in value terms, Acharya said. “Demand for this product will grow over a period of time in India. We anticipate a lot of aspirational demand from smaller cities, where there is a need for off-the-shelf products like this.”

Acharya said JSW is the first in India to manufacture tinplate through a continuous annealing furnace, that creates a better product in terms of “hardness and temper, which is needed for non-oil cans, and a smaller grain size that makes the material tougher”.

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