Jindal Stainless Ltd. on Wednesday announced plans to invest Rs 5,400 crore across three major organic and inorganic capacity expansion decisions.
The company has decided to invest:
Rs 3,350 crore for downstream capacity expansion and upgrading infrastructure at its facilities in Jajpur, Odisha. Of the amount, Rs 1,900 crore has been set aside for expansion, while Rs 1,450 crore has been earmarked for upgradation such as railway siding and renewable energy generation.
Rs 700 crore to enter a joint venture with 49% stake in a stainless steel melt shop in Indonesia, with an annual production capacity of 1.2 million tonne per annum. This will increase the company's melting capacity by over 40% to 4.2 MTPA and will be operational in two years.
Rs 1,340 crore for a 54% equity stake in Chromeni Steels Pvt., which owns a 0.6 MTPA cold rolling mill located in Mundra, Gujarat.
"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," said Abhyuday Jindal, managing director at Jindal Stainless, said in an exchange filing.
"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," he said.
About 90% of the investments announced will be completed through internal accrual, while the rest will be done via borrowing, Jindal said. The expansions mark Jindal Stainless’s growth plans for the next three years, he said.
In terms of the demand scenario, Jindal said there is a rebound being witnessed across US and Europe. “We’re seeing a demand rebound starting the April quarter, across markets like Germany, Italy, Poland, and Spain. Shipping charges continue to remain elevated due to the Red Sea crisis.”
Stainless steel dumping is continuing from China and there is a need to impose duties, according to him. “Protection is required from the government’s end in this matter,” he said.
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