The Business Bytes
New Delhi, May 01, 2024 (TBB Bureau): In a bold move set to redefine the stainless steel landscape, Jindal Stainless, India’s premier stainless steel manufacturer, unveiled ambitious expansion and acquisition plans aimed at catapulting the company to global leadership status. With a strategic investment strategy totaling nearly Rs 5,400 crore, Jindal Stainless is poised to significantly enhance its melting and downstream capacities, solidifying its position as one of the world’s largest stainless steel producers.
The cornerstone of Jindal Stainless’s expansion initiative is a joint venture (JV) for developing and operating a stainless steel melt shop (SMS) in Indonesia, boasting an impressive annual production capacity of 1.2 million tonnes per annum (MTPA). This strategic move will bolster the company’s melting capacity by over 40%, reaching 4.2 MTPA, with an investment exceeding INR 700 crore.
Additionally, Jindal Stainless has earmarked around Rs 1,900 crore for expanding its downstream lines in Jajpur, Odisha, to accommodate the increase in melting capacity. Furthermore, an allocation of nearly Rs 1,450 crore is dedicated to upgrading infrastructural facilities, including railway siding, sustainability-related projects, and renewable energy generation.
In a significant development, Jindal Stainless will acquire a 54% equity stake in Chromeni Steels Private Limited (CSPL), which owns a 0.6 MTPA cold rolling mill in Mundra, Gujarat, through a structured indirect acquisition deal. This strategic acquisition, valued at around Rs 1,340 crore, will enhance the company’s presence in the value-added segment and expand its outreach both domestically and internationally.
Commenting on these transformative decisions, Managing Director Abhyuday Jindal affirmed, “With these acquisitions and investments, we have orchestrated a clear growth plan to become one of the leading players in the world. The Indonesian JV will get us the best of speed and raw material security, and the augmentation of the Jajpur lines will offer enhanced value for domestic and export customers. The cold rolling mill at Chromeni will expand our outreach, both in India as well as abroad, and strengthen our presence in the value-added segment in the long term.”
Echoing Jindal’s sentiments, CEO & Wholetime Director Tarun Kumar Khulbe highlighted the advantages of investing in upstream facilities in Indonesia, citing logistical and cost advantages. “The acquisition of Chromeni aligns with our strategy to increase cold rolled products in our product mix,” he added.
Executive Director & Group CFO Anurag Mantri emphasized the strategic importance of these investments in balancing downstream cold rolled capacities and mitigating raw material risks. “We will finance these investments through a combination of internal accruals and debt, closely monitoring leverage ratios,” he affirmed.
The strategic partnerships and investments announced by Jindal Stainless underscore the company’s commitment to innovation, growth, and leadership in the global stainless steel market. With these initiatives, Jindal Stainless is poised to usher in a new era of excellence and dominance in the stainless steel industry.
