JSW Group to invest ~7,000 crore more in ports sector by 2020

Industrialist Sajjan Jindal on Saturday said his JSW Group will invest ~7,000 crore more in the ports sector over the next three years to create assets in the country as well as abroad. The company is also looking at diluting up to 15 per cent stake in the ports operating company, JSW Infrastructure, to a private equity player soon, and take it public by 2019.

“We will be investing ~9,000 crore more in the ports sector till 2020 (including the ~2,000 crore already invested),” he told reporters at JSW Infrastructure-run flagship port here in Ratnagiri district. The company has already invested ~2,000 crore in the project at Jaigad and the overall investment plan for the company includes ~2,000 crore for capacity expansion here, Jindal added. Of the remaining ~5,000 crore of investments (excluding the ~4,000 crore in Jaigad), Jindal said the company is looking at putting up four berths in Paradip that will have a 50 mtpa capacity and a greenfield project in Fujairah in the UAE. The ~4,000-crore Jaigad Port project has a capacity of 40 million tonnes per annum now, which will be doubled by 2020 and raised further to 125 mtpa by 2025, he said.

At the company level, total capacity target is 200 mtpa by 2020, Jindal said, adding the port now handles dry bulk cargo but has plans to enter container handling.

One of the biggest opportunities that the port is eyeing is the proposed public sector mega refinery by IOC- HPCLBPCL in the Konkan belt of Maharashtra, even though the exact location is not finalised yet. Jindal said JSW is “pitching” to act as a “captive port” for the proposed refinery project which will host the very large crude carriers to ferry in crude, and also ships to evacuate refined products. The JSW group has tied up with the Hiranandani Group, which is investing up to ~4,000 crore to construct an LNG terminal at the Jaigad Port and then evacuate the cargo through a dedicated pipeline that will be connected with GAIL’s pipeline at Dabhol.

What is to be noted is that the Ratnagiri Gas & Power (formerly Dabhol Power) does the same work already, but Jindal is confident that the growing market will ensure there are opportunities for all. The JSW Group is also looking at sites in the Palghar district which is north of Mumbai, to build a greenfield port.

Jindal said the Palghar project will be independent and not a part of the Wadhawan Port being developed by the Centre and the state. He said the company, which primarily handles captive cargo for group companies, had a turnover of ~4,000 crore and a pretax profit of ~800 crore in last the financial year.

JSW Infrastructure is fullyowned by the Jindal family now and is looking at first diluting up to 15 per cent before launching an IPO, Jindal said.

It has decided on milestones before it going public, he added, specifying that a capacity of utilisation of 100 mtpa is essential before it goes public, which at present is around 30 mtpa and 100 mtpa target can be achieved by 2019 and will be jacked up further to 140 mtpa by 2020. The total debt of the company stands at ~1,500 crore at present.

With a focus on port connectivity, the company has invested ~50 crore on a 42-km road link with the National Highway 17, which was inaugurated today. The company also laid the foundation stone for a 34-km rail link between Jaigad and Digni on the Konkan Railway route, which includes 18-km of routes passing through tunnels. Jindal said establishing rail connectivity between Chiplun and Karad on the Deccan Plateau being carried out by the government now will enhance the port's addressable hinterland.