Stainless steel manufacturer Jindal Stainless has announced a INR 5,400 crore investment plan to expand melting and downstream capacities. The company’s three-pronged strategy aims to solidify its position as a major player in the global stainless steel market.
Expansion details:
Indonesian JV: A 49% joint venture to establish a 1.2 million tonnes per annum (mnt/year) stainless steel melt shop (SMS) in Indonesia. This will increase Jindal’s melting capacity by 40% to 4.2 mnt/year, with an investment exceeding INR 700 crore.
Downstream capacity boost: INR 1,900 crore allocated for expanding downstream processing lines in Jajpur, Odisha, to handle increased melting capacity.
Strategic acquisition: A 54% stake acquisition in Chromeni Steels Private Limited (CSPL), a Gujarat-based cold rolling mill with a capacity of 0.6 mnt/year, for INR 1,340 crore.
Potential benefits:
- The Indonesian JV could offer faster project completion and potentially secure raw material supplies.
- The Jajpur expansion might enable Jindal to cater to a wider range of customers in domestic and export markets.
- The Chromeni acquisition could broaden Jindal’s product portfolio and market reach.
Financial implications:
The company plans to finance the expansion through a combination of internal accruals and debt, with a focus on maintaining prudent leverage ratios.
Industry standing:
Jindal Stainless is a leading Indian stainless steel producer with an annual turnover of INR 35,700 crore ($4.30 billion) in FY’23 and a current melting capacity of 3 mnt/year. It operates a global network with seven manufacturing and processing facilities across 15 countries.
These significant investment plans potentially positions the company as a strong contender in the global stainless steel market.