The largest company making stainless steel goes abroad, will set up a factory in Indonesia!
New Delhi: Jindal Stainless has announced expansion and acquisition plans to enhance its melting and downstream capabilities. It is the country’s leading stainless steel manufacturing company. It has done this with the aim of becoming one of the largest stainless steel manufacturers in the world. The company announced a three-tier investment strategy of approximately Rs 5,400 crore to achieve global leadership in stainless steel. Jindal Stainless has entered into a joint venture to set up and operate a stainless steel melt shop (SMS) with a manufacturing capacity of 12 lakh tonnes per annum (MTPA) in Indonesia. With an investment of more than Rs 700 crore, the melting capacity of the company will increase by 40 percent to 4.2 MTPA. The company has earmarked around Rs 1,900 crore for expansion of its ‘downstream’ lines at Jajpur in Odisha as part of the process to increase melting capacity.
Will acquire Cromony Steels
Additionally, the company has earmarked approximately Rs 1,450 crore for the advancement of infrastructure facilities such as railway sidings, sustainability projects and renewable energy generation. The company will acquire 54% equity stake in Chromeni Steels Pvt (CSPL), owner of 0.6 MTPA cold rolling mill at Mundra, Gujarat, through an indirect acquisition transaction. There is an outlay of about Rs 1,340 crore in the deal. This includes existing debt of Rs 1,295 crore and the remaining amount of Rs 45 crore for equity purchase.
Addressing a press conference on the historic decisions approved by the Board of Directors of Jindal Stainless, Managing Director Abhyudaya Jindal said, ‘With these acquisitions and investments, we have prepared a clear growth plan to be among the leading companies. Indonesian JV joint venture will give us best speed and security of raw material. With the expansion of Jajpur lines, domestic and foreign customers will get better prices. Kromeni’s cold rolling mill will increase our reach in India as well as abroad. Our presence in the long-term value-added segment will be strengthened.
Investment in Indonesia soon
Speaking on the occasion, Tarun Khulbe, CEO and Whole-time Director, said, ‘Investment in upstream facilities in Indonesia is a promising model. Given the existing industrial park facilities at the site, operations are expected to commence in the next 24 months. Logistics and energy costs make Indonesia more favorable for such investments. In addition, the Indonesian government has banned the export of nickel ore. It is promoting investment in downstream facilities through long-term tax breaks. The acquisition of Chromeni is in line with our strategy to expand our portfolio of cold roll products into differentiated products.
