The country’s largest private sector steel maker, JSW Steel, has set a timeline for the first phase of its proposed 10-million-tonne steel plant in Bengal. In an e-mailed interview with Ishita Ayan Dutt, JSW Steel VC and MD Sajjan Jindal, outlines the priorities in the near as well as long terms. Edited excerpts:
Mutual stockholding was one of the items in your deal with JFE Holdings of Japan. With the equity infusion in JSW Steel frozen, are you in any discussions for picking up a stake in JFE? If so, is it for about five per cent or more?
Comprehensive discussions with JFE over a wide range of issues of mutual interest continue on a regular basis. The priority, right now, is implementation of the technical collaboration for producing auto grade steel and general technical assistance to improve business performance efficiency. The modalities for the same are being worked out. Both JFE & JSW feel Indian markets present a huge potential for growth as well as for the benefit of both the corporations through this historic collaboration.
Is JFE still keen on picking up a stake in JSW Bengal? Or is that now ruled out with the deal having gone through with the parent company?
The robust demand for steel in emerging markets makes India a favoured destination for investment. On the other hand, demand growth for steel is tapering off in developed economies. Given this scenario, JSW’s Bengal project will definitely attract the interest of foreign investors. At our board meeting held on October 26, we had announced the first phase of West Bengal investment. Currently, we are working on a capital structure on the premise of JSW Steel parent company investing in the equity of the Bengal project. We will take a call on equity participation at an opportune time, depending on future growth plans and market dynamics.
When you say Bengal project will definitely attract the interest of foreign investors, does it mean investors other than JFE? Or is JFE the only option?
We will evaluate all options at an opportune time. At this stage, we do not consider it appropriate to comment beyond this stated position.
The capacity utilisation of your US plant is still very low. Would you look at offloading a strategic stake in the US plant? Are you open to selling it?
While you are right in pointing out the low capacity utilisation at our Houston facility, what is more important is that we are now slowly inching towards stability with positive Ebitda (earning before interest, taxes, depreciation and amortisation) figures during the last quarter as per our guidance. While we are not overly excited about markets being upbeat in the US, there is surely some space for cautious optimism. At this stage, we continue to watch the market developments in the US closely.
