This investment will be used to expand the company's plate and pipe mill unit.
John Hritz, the CEO, said during an exclusive interview with FOX Business' Liz Claman on "Countdown to the Closing Bell" that the new capacity was planned long before President Donald Trump imposed tariffs of 25% on imported steel and 15% on aluminum.
Houston-based JSW Steel USA is planning to modernize an existing plant and build a new facility thanks to a $500 million investment from its parent company in India.
"The $500 million investment from JSW Steel to expand its operations in Texas shows what we can achieve when we work to be better every single day", said Greg Abbott, Texas Governor. JSW would be aided by a $ 3.4 million grant from the Texas Enterprise Fund as part of the memorandum signed with the Governor of Texas. "This will triple post the modernisation", said Parth. The new facility is expected to create at least 500 jobs in Texas.
"It reiterates our commitment to stay invested and grow in the USA market".
He noted that it also provides JSW Steel US an opportunity to participate in the country's infrastructure development and job creation priorities.
In the first nine months of fiscal-year 2018, the company's plate mill produced 177,428 mt at a capacity utilization rate of just 24%, compared with 128,937 mt at a rate of 18% over the same period in fiscal-year 2017. In Texas, the company has access to cheap natural gas and scrap steel which is beneficial to manufacturing steel by using electric arc furnace.
"From India alone, we have been importing 1.5 lakh ton of raw steel plates". This will come to an end by October 2020 when the second phase of expansion is complete.
Junior Jindal, Parth, who is also a director at the Group and also heads the U.S. operations of JSW Steel, was quick to add the plant since then has nearly turned around with cash profit of $180 million previous year and expressed optimism that it will turn around fully by 2020.