Jindal to source raw materials from overseas firms

The Ratan Jindal-controlled Jindal Stainless Steel is planning to go overseas for sourcing its raw material. Jindal is looking at strategic alliances with companies based in South Africa, South East Asia, and Europe for long-term supplies of ferro chrome, chrome ore and nickel.

Arvind Parakh, director - finance, Jindal Stainless told Business Standard , "We are in talks with 2-3 companies in South Africa and South East Asia to consolidate our long-term requirements of raw materials. A final decision will be taken in the next few days." The company has planned similar alliances with trading companies in Europe, he added.

"Since there is a considerable shortage of raw materials, especially nickel, both pricing and availability have become a critical issue for all the players. Therefore, we want to ensure supplies for our upcoming ferro-alloys and stainless steel project in Orissa," Parakh said.

The Orissa project envisages a 1.6 million tonne integrated stainless steel plant along with 3 lakh tonne of ferro chrome, 1.6 lakh tonne of ferro manganese and ferro silicon and 500 MW of captive power generation. The company has planned a total investment of Rs 7,000 crore for this project.

The project is split in three phases. The first phase includes setting up of a 1.5 lakh tonne per annum high carbon ferro chrome unit, along with a 30,000 tonne per annum high carbon ferro manganese and 60,000 tonne per annum silico manganese unit.

This phase, which entails an investment of Rs 960 crore is expected to be commissioned during 2005-2006.

Jindal is also looking at marketing ventures in China and South East Asia.

"We are also discussing with trading houses for long-term offtake contracts of finished goods, as there is a considerable shortage of stainless steel in China.