JSW Steel Limited

JSW Steel Limited, established in 1982 by founder Sajjan Jindal, is a leading Indian multinational steel producer headquartered in Mumbai, Maharashtra.

Founders and Leadership:

• Founder: Sajjan Jindal
• Chairman: Sajjan Jindal
• CEO: Jayant Acharya

Legal Structure: JSW Steel operates as a public limited company and is a flagship entity of the JSW Group, a diversified conglomerate with interests in steel, energy, infrastructure, and cement.

History: JSW Steel's history can be traced back to 1982, when the Jindal Group acquired Piramal Stell Limited, which operated a mini steel mill?at Tarapur in Maharashtra and renamed it as Jindal Iron and Steel Company.?Soon after the acquisition the group set up its first steel plant in 1982 at Vasind, near Mumbai.

Business Model: JSW Steel's business model focuses on the production and sale of a diverse range of steel products, including flat and long steel products, wire products, and plates. The company serves various industries such as construction, infrastructure, automotive, and electrical applications.

Revenue: As of 2024, JSW Steel reported revenues of ?1,77,000 crore.

Global Reach: JSW Steel has a significant global presence, with manufacturing plants in India and the United States. The company exports its products to over 100 countries, serving markets in North America, Europe, the Middle East, and Asia.

Vision: JSW Steel Limited's vision is to achieve global recognition for quality and efficiency while nurturing nature and society. This vision reflects the company's commitment to sustainable growth, ethical business practices, and contributing positively to the communities in which it operates.

Mission: The company's mission focuses on delivering high-quality steel products, fostering innovation, and contributing to sustainable development.

Core Values: JSW Steel Limited's core values are fundamental principles that guide its operations and corporate culture. These values are:

1. Transparency: JSW Steel emphasizes openness in its business practices, ensuring clear communication and accountability with stakeholders.

2. Strive for Excellence: The company is committed to achieving the highest standards in quality and performance across all its operations.

3. Dynamism: JSW Steel fosters a dynamic environment that encourages adaptability and responsiveness to changing market conditions.

4. Passion for Learning: The company values continuous learning and innovation, striving to stay ahead in the industry through knowledge and skill development.

Key Offerings

JSW Steel offers a wide range of steel products catering to diverse industries. Below are the key offerings:

1. Flat Products:

• Hot Rolled (HR) Coils and Sheets: These are used in construction, automotive, and general engineering industries.
• Cold Rolled (CR) Coils and Sheets: These are known for superior surface finish and dimensional accuracy, making them ideal for specific applications.
• Galvanized (GI) Coils and Sheets: These are corrosion-resistant products used primarily in roofing, cladding, and automotive components.
• Color Coated Products: These are used in manufacturing white goods, roofing, and cladding.
• Electrical Steel: Essential for use in transformers, motors, and electrical appliances.

2. Long Products:

• TMT Bars: These are used for reinforcement in construction projects.
• Wire Rods: Utilized in the production of wires, cables, and fasteners.
• Rails: Supplied to Indian Railways and various infrastructure projects.
• Beams and Columns: Used in structural applications such as buildings and bridges.
• Angles and Channels: Commonly used in fabrication and construction industries.
• Plates and Coils: Utilized in shipbuilding, heavy engineering, and pressure vessels.

3. Value-Added Products:

• Pre-Engineered Buildings (PEB): Offered through JSW Steel Processing Centres, providing cutting and slitting of coils for various applications.
• Avante Steel Doors: Specialized steel doors for both residential and commercial applications.

4. Specialty Products:

• High-Strength Steel: Used for specific heavy-duty applications, such as in the automotive and aerospace industries.
• Hollow Sections: Utilized in structural and architectural applications.

JSW Steel’s offerings are designed to meet the needs of a variety of industries, including construction, automotive, infrastructure, and electrical applications, through their innovative and high-quality steel products.

Unique Selling Propositions

JSW Steel's unique selling propositions (USPs) are the key factors that differentiate it from competitors in the steel industry. These include:

1. Market Leadership: JSW Steel is India's third-largest steelmaker, with a combined capacity of over 14 million tonnes per annum (MTPA), enabling the company to achieve economies of scale.

2. Technological Innovation: The company was the first steel producer globally to use Corex Technology for producing hot metals, showcasing its commitment to technological advancement.

3. Cost Efficiency: JSW Steel is recognized as one of the lowest-cost steel producers worldwide, contributing to its competitive pricing strategy.

4. Diversified Product Portfolio: The company offers a wide range of steel products, including flat and long products, catering to various industries such as construction, automotive, and infrastructure.

5. Customer-Centric Approach: JSW Steel has evolved from a 'sale of product' business to a 'sale of solution' business, focusing on providing end-to-end solutions to meet customer needs and expectations.

6. Global Presence: With operations in over 140 countries, JSW Steel has a significant international footprint, enhancing its market reach and brand recognition.

7. Sustainability Commitment: The company is dedicated to sustainable practices, aiming to lead steel manufacturing by boosting efficiencies and promoting ambitious energy, water, waste, and carbon reduction goals.

8. Strategic Partnerships: JSW Steel has formed strategic alliances, such as the recent agreement with South Korea's POSCO to establish an integrated steel plant, demonstrating its commitment to growth and technological advancement.

Customer Segments

JSW Steel serves a diverse range of customer segments across various industries, both domestically and internationally. The primary customer segments include:

1. Construction and Infrastructure:

• Real Estate Developers: Utilize JSW Steel's products for residential and commercial building projects.
• Infrastructure Projects: Incorporate steel in bridges, highways, and public utilities.

2. Automotive and Original Equipment Manufacturers (OEMs):

• Automobile Manufacturers: Require high-quality steel for vehicle production.
• White Goods Producers: Use steel in the manufacturing of appliances like refrigerators and washing machines.

3. Energy Sector:

• Oil and Gas Industry: Employs steel for pipelines and drilling equipment.
• Renewable Energy Projects: Utilize steel in the construction of wind turbines and solar panel structures.

4. Packaging Industry:

• Tinplate Consumers: Use steel for packaging food, beverages, and other goods.

5. Micro, Small, and Medium Enterprises (MSMEs):

• Fabricators and Small Manufacturers: Rely on steel for various fabrication and manufacturing needs.

6. Retail Customers:

• Individual Buyers and Small Contractors: Purchase steel products for smaller-scale construction and renovation projects.

7. Export Markets:

• International Clients: JSW Steel exports to over 140 countries, serving a global clientele across multiple industries.

Geographic Distribution

JSW Steel has established a robust geographic distribution network, encompassing both domestic and international markets.

Domestic Operations:

In India, JSW Steel's operations are strategically located to optimize production and distribution:

• Vijayanagar Works, Karnataka: This facility is the largest single-location steel-producing plant in India, with a capacity of 12 million tonnes per annum (MTPA).
• Dolvi Works, Maharashtra: Situated on the west coast, this plant enhances JSW Steel's access to port facilities, facilitating both domestic distribution and exports.
• Salem Works, Tamil Nadu: Specializing in the production of special alloy steels, this plant caters to the automotive sector and other industries requiring high-grade steel.
• Bhushan Power & Steel Limited (BPSL), Odisha: Acquired to expand JSW Steel's footprint in the eastern region, this facility contributes significantly to the company's overall production capacity.

International Operations:

JSW Steel has extended its presence beyond India to serve global markets:

• JSW Steel USA, Baytown, Texas: This facility focuses on the production of high-quality steel products for the American market. In 2024, JSW Steel announced a $110 million investment to upgrade the Baytown operations, aiming to enhance production capabilities and operational efficiency.
• JSW Steel USA, Mingo Junction, Ohio: Acquired in 2018, this plant specializes in the production of hot-rolled coils, serving various industries across the United States.
• European Presence: JSW Steel has a presence in Italy, further extending its reach within the European steel market.

Export Markets:

JSW Steel is one of India's largest steel exporters, with a presence in over 100 countries across five continents. Approximately 15% of its production is exported annually, allowing the company to strategically balance between domestic sales and exports based on market conditions.

Revenue Stream

JSW Steel's revenue streams are primarily derived from the production and sale of various steel and related products. The key contributors to their revenue include:

1. Steel Products:

• Long Rolled Products (18%): These include products such as bars, rods, and structural steel, commonly used in construction and infrastructure projects.
• Galvanized Coils/Sheets (15%): Steel sheets coated with zinc to prevent corrosion, widely used in automotive, construction, and appliance manufacturing.
• Cold Rolled (CR) Coils/Sheets (9%): Flat steel products processed at room temperature, offering superior surface finish and dimensional accuracy, used in automotive and home appliances.
• Plates/Pipes (5%): Thick steel plates and pipes utilized in shipbuilding, oil and gas, and heavy machinery industries.
• Other Miscellaneous Steel Products (5%): This category includes various specialized steel products catering to diverse industrial applications.

2. Iron Ore (2%): Revenue from the sale of iron ore, a primary raw material for steel production, either for internal use or external sales.

Geographical Revenue Distribution:

• Domestic Sales (70%): A significant portion of JSW Steel's revenue is generated from the Indian market, serving sectors like construction, automotive, and infrastructure.
• International Sales (30%): The company exports to over 100 countries, with substantial markets in Europe, the Middle East, and North America.

In the financial year 2022-2023, JSW Steel reported consolidated revenue from operations of ?1,65,960 crore (approximately $20.18 billion USD).

Cost Structure

JSW Steel's cost structure encompasses various components, including raw materials, finance costs, depreciation, and other operational expenses.

1. Raw Materials and Operational Costs: Raw materials constitute a significant portion of JSW Steel's expenses. In the fiscal year 2018-19, the company procured 70% of its iron ore from domestic sources, aiming to reduce costs and enhance supply chain efficiency. Initiatives such as commissioning a coke oven battery at Dolvi, diversifying coal procurement, and optimizing logistics have been implemented to further reduce operational costs.
2. Financial Expenses: Financial expenses include finance costs and depreciation. For the fiscal year 2022-23, JSW Steel reported finance costs of ?6,108 crore and depreciation and amortization expenses of ?5,435 crore.
3. Cost of Capital: The Weighted Average Cost of Capital (WACC) for JSW Steel is reported at 12.83% as of December 25, 2024. This metric reflects the company's cost of financing its operations through equity and debt.

Cost Optimization Strategies:

JSW Steel employs several strategies to optimize costs, including the development of analytical tools like the Dynachem model for optimizing ferro-alloy costs and the establishment of a Central Purchase Committee to streamline procurement.

These elements collectively define JSW Steel's cost structure, influencing its financial performance and strategic decisions.

Key Resources

JSW Steel's key resources encompass its extensive raw material reserves, advanced production facilities, strategic partnerships, and a skilled workforce.

• Raw Material Reserves: JSW Steel operates 13 captive iron ore mines in Karnataka and Odisha, with aggregate reserves of 1.34 billion tonnes. These reserves are crucial for ensuring a consistent supply of high-quality raw materials for steel production.
• Production Facilities:The company has established state-of-the-art production facilities, including pellet plants and coke oven facilities at Vijayanagar and Dolvi. Notably, JSW Steel has constructed the world's largest conveyor system, extending 24 km from its captive mines to the Vijayanagar plant, enhancing logistical efficiency.
• Strategic Partnerships: JSW Steel has entered into strategic partnerships to secure essential resources. In August 2024, the company acquired a 67% stake in the Australian firm M Res NSW HCC for $120 million, aiming to expand its coal reserves and ensure a consistent supply of hard coking coal.
• Skilled Workforce: The company's success is also attributed to its skilled workforce, which drives innovation and operational excellence across its various facilities.

These resources collectively enable JSW Steel to maintain its position as a leading steel producer, ensuring operational efficiency and the ability to meet market demands effectively.

Key Partners

JSW Steel has established strategic partnerships to enhance its technological capabilities, expand its production capacity, and strengthen its market presence. Notable collaborations include:

• JFE Steel Corporation (Japan): JSW Steel maintains a strategic collaboration with JFE Steel, a global leader in steel production. This partnership enables JSW Steel to leverage advanced technologies for producing high-value special steel products.
• POSCO (South Korea): In October 2024, JSW Steel signed a preliminary agreement with POSCO to establish an integrated steel plant with an initial capacity of 5 million metric tons annually. The collaboration also explores joint ventures in battery materials for electric vehicles and renewable energy solutions.
• IIT Bombay (India): JSW Group has partnered with the Indian Institute of Technology Bombay to establish a technology hub focused on developing industrial applications and solutions for the Indian steel industry. This collaboration aims to advance research in sustainable steel manufacturing and its applications.
• Praxair (now Linde plc): In 1995, JSW Steel entered a joint venture with Praxair to build the world's largest cryogenic air separation plants in Bellary, Karnataka, enhancing its production capabilities.

These partnerships have been instrumental in JSW Steel's growth, enabling the company to adopt cutting-edge technologies, expand its production capacities, and contribute to the development of the steel industry both in India and globally.

Customer Relationships

• Customer Relationship Management (CRM): To enhance customer satisfaction and loyalty, JSW Steel has implemented effective CRM strategies. By leveraging technology, the company aims to streamline interactions and provide personalized experiences to its clients.
• Customer Satisfaction Surveys: JSW Steel conducts customer satisfaction surveys through professional third-party consultants, covering aspects such as product quality, order servicing, and customer relationships. These surveys help the company understand customer needs and improve its services.
• Customer-Centric Approach: The company focuses on value addition for customers and remains a supplier of choice in all markets. JSW Steel is committed to operating processes and conducting marketing promotions in a transparent and responsible manner by sharing product information.
• Grievance Redressal: Grievance redressal is a key element of JSW Steel’s customer strategy. The company has a decentralized system to ensure early resolution of issues faced by customers. In FY 2018-19, the company received 1,639 complaints from customers, of which 99.8% were resolved.
• AIKYAM One View App: This unified platform consolidates customer interactions, offers real-time order tracking, and provides access to financial information. The in-app AIKYAM bot further enhances customer support, significantly improving overall customer experience and satisfaction.
• JSW One MSME Platform: A digital marketplace designed to streamline steel supply and demand for Micro, Small, and Medium Enterprises (MSMEs). It connects manufacturers to steel suppliers, providing a consistent, flexible, and trusted steel solution partner for raw material needs.
• Digital Transformation Initiatives: JSW Steel is embracing advanced technologies like Artificial Intelligence, Big Data, Advanced Robotics, and Hybrid Cloud to innovate its product range, drive cultural change, and deliver compelling experiences to customers.
• JSW Sambandh Portal: A digital platform that helps customers connect with JSW Steel, offering features like order tracking, account overview, and more, to enhance customer engagement and satisfaction.

Distribution Channels

JSW Steel employs a comprehensive distribution network to effectively deliver its products to customers across various regions. Key components of this network include:

1. Retail Network (JSW Steel Retail Outlets):

• JSW Steel has established a vast retail presence in India, with over 6,500 outlets across approximately 495 districts.
• These outlets enable customers, including businesses and consumers, to access a wide range of steel products such as TMT bars, structural steel, and flat steel products.
• The retail network also helps expand brand visibility and strengthen customer loyalty through personalized services and product availability.

2. JSW Shoppe Model:

• The "JSW Shoppe" is an exclusive retail model aimed at enhancing direct customer interaction and providing steel solutions.
• These outlets are designed to cater to the growing demand for high-quality steel products while improving the customer experience and boosting brand recognition.

3. JSW One Platform:

• The JSW One platform integrates the steel and cement businesses of JSW Group, providing a seamless digital experience for customers to order steel products.
• This platform serves as a marketplace for steel products and services, enabling the company to reach a wider customer base and streamline distribution.

4. Global Distribution Network:

• JSW Steel also serves international markets through its production facilities in various countries, including the United States (Mingo Junction, Ohio, and Baytown, Texas).
• The company leverages a strong export network to supply steel to regions such as North America, Europe, and Africa, effectively catering to global demand.

5. Distributor Partnerships:

• JSW Steel has partnered with authorized distributors across India and abroad to facilitate the widespread availability of its steel products.
• These distributors play a crucial role in reaching customers in remote locations and ensuring timely delivery of products.

6. Direct Supply to Industry Customers:

• JSW Steel also directly supplies steel to large industries, construction companies, automotive manufacturers, and infrastructure developers.
• The company offers tailored solutions and technical support to meet specific requirements of these industries.

Competitors

JSW Steel operates in a highly competitive global steel industry, contending with several prominent companies. Key competitors include:

• Tata Steel Limited: An Indian multinational steel-making company headquartered in Mumbai, Maharashtra. Tata Steel is among the largest steel-producing companies in the world, with an annual crude steel capacity of 35 million tonnes. It operates in 26 countries, including India, the Netherlands, and the United Kingdom, and employs around 80,500 people.
• Steel Authority of India Limited (SAIL): A government-owned steel manufacturer headquartered in New Delhi, India. SAIL is one of the largest steel producers in India, with an annual production capacity of over 20 million tonnes. It operates several steel plants across India, including in Bhilai, Bokaro, and Rourkela.
• ArcelorMittal Nippon Steel India (AM/NS India): A joint venture between ArcelorMittal and Nippon Steel, AM/NS India is a significant player in the Indian steel industry. It operates steel plants in Hazira, Gujarat, and has a combined annual production capacity of over 10 million tonnes.
• Jindal Steel and Power Limited (JSPL): An Indian steel and energy company headquartered in New Delhi, India. JSPL has a significant presence in the steel industry, with an annual production capacity of over 10 million tonnes. It operates steel plants in India and has a presence in Oman and the United States.
• Nippon Steel Corporation: A Japanese steel producer headquartered in Tokyo, Japan. Nippon Steel is one of the largest steel producers globally, with an annual production capacity of over 50 million tonnes. It operates steel plants in Japan and has a significant presence in the United States and India.