Strategic objectives
JSW Group's strategy is based on five pillars:
In line with the existing and predicted market conditions, JSW Group has set the following strategic objectives for 2020-2030:
average EBITDA margin in 2020-2030 of at least 25%
development of resource base as regards coking coal through development investments related to accessing new deposits and mine levels
increase in the share of coking coal production and sales, with stable and attractive quality parameters, to over 85% from 2021
Safe JSW - further enhancement of our high safety standards
Revenue diversification:
- average of 10% of revenue coming from sales of products not related to core business in 2020-2030
- geographic diversification
Effective JSW:
- work intensity index of at least 4.5 running metres per thousand tonnes annually,
- optimisation of cost structure and levels using innovative solutions
- effective use of coal derivatives and striving for energy self-sufficiency
Achieving the main objectives will be possible by achieving associated targets:
Learning organisation - knowledge management and continuous learning
Reducing environmental impact
Stable employer developing its employees' competences
Flexible Organisation 4.0 - development through innovations.
The strategic objectives are defined on the basis of areas in which JSW Group conducts operating and investing activities. Its 2020-2030 strategy introduces another operating area - people and the environment, which is equally as important as the other areas: finance, development, customers and internal processes. The Company's vision is a reflection of its values, from business values through to environmental aspects.
Objectives that result from strategic operating areas are being directly implemented through operating activities in each segment:
| JSW Group's strategic objective | Segment/area where the objective will be achieved | ||||
|---|---|---|---|---|---|
| Coal segment | Coke segment | Processing segment | Diversification | Support area | |
| Average EBITDA margin in 2020-2030 of at least 25%. | X | X | X | X | X |
| Development of resource base as regards coking coal through development investments related to accessing new deposits and mine levels. | X | ||||
| Increase in the share of coking coal production and sales, with stable and attractive quality parameters, to over 85% from 2021. | X | X | |||
| Revenue diversification: Average of 10% of revenue coming from sales of products not related to core business in 2020-2030 - Geographic diversification. | X | X | X | ||
| Safe JSW - further enhancement of our high safety standards. | X | X | X | X | |
| Effective JSW: Work intensity index of at least 4.5 running metres per thousand tonnes annually, Optimisation of cost structure and levels using innovative solutions, Effective use of coal derivatives and striving for energy self-sufficiency. | X | X | X | X | X |
| Learning organisation - knowledge management and continuous learning. | X | X | X | X | X |
| Reducing environmental impact. | X | X | X | X | X |
| Stable employer developing its employees' competences. | X | X | X | X | X |
| Flexible Organisation 4.0 - development through innovations. | X | X | X | X | X |
JSW Group's development plan defines the key assumptions with regard to directions and possibilities for development in the long term. Development processes are envisaged to be based mainly on developing the core business, without ruling out development based on the acquisition of attractive assets and entities as elements in potential diversification and business model evaluation.
JSW Group's investment programme encompasses investment projects for 2020-2030 worth in total approx. PLN 24.5 billion, with the highest priority given to projects focusing on:
- development of mining activities,
- modernisation and optimisation in coke segment,
- reaching energy self-sufficiency by developing new generation capacities based on products accompanying coal mining - methane, and coke production - coke oven gas,
- improving the Group's profitability and integrating various operating segments,
- implementing innovative technologies,
- improving efficiency in core business and support functions.
The highest priority is given to investment projects that offer the highest rates of return and flagship projects within the core business, which are of key importance to building JSW Group's competitive advantage and leading to the optimisation of operating costs.
JSW plans to incur approx. PLN 20.5 billion in investment expenditures in 2020-2030, which constitutes approx. 84% of the Group's total expenditures. Subsidiary JSW KOKS expects to spend approx. PLN 2.2 billion on investments. Development investments constitute 35% of JSW Group's planned CAPEX.
Chart. CAPEX PLN billion
Development of mining activities
JSW plans a gradual increase in coal output until 2030, from approx. 14.8 Mt in 2019 to approx. 18 Mt in 2030. The strategy sees an eventual increase in production through investments in the expansion of new mining levels and commencement of mining in the Bzie Dębina area.
Within the planned mining output structure, coking coal is expected to rise from approx. 71% in 2019 to over 85% from 2021, with a simultaneous decrease in the production of coal for energy-generation purposes from approx. 29% in 2019 to approx. 12% in 2030.
Over 80 thousand running metres of walkways on average is planned at JSW in 2020-2030.
JSW expects productivity per employee to increase from approx. 700 tonnes to approx. 850 tonnes per person by 2030.
At the same time, the Strategy sees average employment at the Group increase from approx. 30 thousand positions now to approx. 31 thousand in 2030.
Selected production indicators of the JSW Capital Group
Modernization and optimization of the coke segment functioning
The coke segment constitutes JSW Group's second-largest operating area.
The investment programme for the coke segment includes projects in the period 2020-2030 worth in total approx. PLN 2.2 billion, which are divided into:
- investments in the area of coke production,
- investments in the area of coal derivatives,
- investments in the area of energy,
- innovative projects and R&D projects,
- other investments.
Strengthening our position as Europe's top producer of coke will be possible by achieving strategic objectives, focused on the following areas:
- maximum use of coals produced by JSW Group's mines in the production of coke,
- maximum and flexible use of coking plants' production capacities,
- optimisation of technological processes,
- energy independence,
- greater synergies between the mining and coking areas,
- product diversification by extending the processing chain.
The 2020-2030 strategy sees a sustainable level of coke production and sales, at the stable level of approx. 3.5 Mt.
Stable coke production
The business model in the coke production segment assumes adjustment of the production level and mix for each coking plant to maximize the overall margin generated by the Group.
- The coke production profile assumed in JSW KOKS takes into account the largest share of blast furnace coke with CRI and CSR parameters – which accounts for more than 70% of total volumes now and more than 78% ultimately.
- The Company’s accepted target model calls for maintaining a nominal production capacity of approximately 3.6 million tons of coke per annum.
Chart. COKE PRODUCTION MIX in million tons
Aside from producing a wide array of coke, the coking segment is responsible for producing and preparing for sale the by-products of the coke production process, i.e. coal derivatives.