HOLDING GROUND IN THE LAND OF GIANTS

As India's cement majors snap up rivals in billion-dollar deals, JSW CEMENT is betting on organic expansion, green credentials, and group synergies to claim its place among India's heavyweights

- By Arjun Yadav

In the mid-1990s, when JSW Steel began constructing India's first private integrated steel plant in the arid plains of Vijayanagar, Karnataka, it triggered more than just an industrial revival in South India. It set the stage, albeit inadvertently, for a cement story that would take shape more than a decade later.

At the heart of this story lies a waste product: slag, a byproduct of steelmaking. For every tonne of hot metal produced, nearly 350 kg of slag is generated. Initially, JSW offloaded this material to cement companies under long-term contracts. But when the 2008 global financial crisis struck, these companies backed out of their agreements, leaving JSW Steel staring at a logistics nightmare that could have shut down its furnaces.

That forced a bold decision: to build a cement business from scratch.

Born Out of Compulsion

"Our entry into cement was born out of necessity, not strategy," recalls Parth Jindal, Managing Director, JSW Cement. Speaking to investors and analysts recently, he detailed how the company placed its first order for a vertical roller mill in Vijayanagar in 2009. With the allocation of limestone mines in Andhra Pradesh, the company officially launched its first integrated 5.5 million tonne unit in 2012.

But the early years were anything but easy. Unlike eastern India, where slag cement enjoys a premium, South Indian consumers judged cement by its colour. They perceived darker cement as stronger. JSW's slag-based product, light in hue, was seen as inferior. The company had to sell at steep discounts in the southern market up to 30 per cent lower than competitors, resulting in sustained losses. As a result, by 2015, the group considered exiting the business.

"I was in college then. By the time I returned, the business was still there and losing money. I took over in 2016 and brought in a new management team. We started from the ground up," Jindal said.