A consortium led by Sajjan Jindal-owned JSW Steel is close to taking control of the struggling Ilva plant at Taranto in southern Italy. The plant has a annual production capacity of 10 million tonnes: 40 per cent of Italy’s national production.
JSW has submitted the final bids along with Cassa Deposit e Prestiti, Italy’s sovereign fund, businessman Leonardo el Vecchio, and Italian steel company Arvedi.
JSW will invest about $400 million (₹2,600 crore) for a 35 per cent stake in Ilva. It will also operate the company, which employs 14,000 people.
The only other contender is Lakshmi Mittal’s Arcelor Mittal SA, which has teamed up with Italian steel processor Marcegaglia.
The Ilva plant was forced to suspend operations last year and slipped into insolvency after regulators found it polluting the environment. Both bidders submitted technical plans to ensure that the plant will not pollute the environment when operations resume.
With its long track-record of turning around sick units, JSW may well emerge the winner. However, even if the Indian company succeeds, it will have to contend with the onslaught of low-cost steel into Europe from China, said an analyst.
In 2004, JSW Steel acquired Southern Iron and Steel Company at Salem in Tamil Nadu which had accumulated losses of ₹350 crore, pruning it to about ₹130 crore in three years. The plant’s production capacity has also risen — to 1 million tonnes from three lakh tonnes, with investment of ₹800 crore.