Jindal Stainless announces Rs 5,400 crore strategic investments aimed at expanding capacity
May 01, 2024
New Delhi [India], May 1 : Jindal Stainless announced investment of totalling nearly Rs 5,400 crores to increase its melting and downstream capacities on Wednesday. The announcement will further increase the stainless steel production of the company.
According to a statement by the company, it has announced a three-pronged investment plan to enhance its capacity in steel production.
The first phase of the strategy involves a 49% partnership in a joint venture (JV) to develop and operate a stainless steel melt shop (SMS) in Indonesia, targeting an annual production capacity of 1.2 million tonnes per annum (MTPA).
The partnership is expected to boost the company's melting capacity by over 40 per cent to 4.2 MTPA, with an investment exceeding Rs 700 crore.
Additionally, the company allocated approximately Rs 1,900 crore for expanding its downstream lines in Jajpur, Odisha, to accommodate the increased melting capacity. Further, the company also announced Rs 1,450 crore investment for upgrading infrastructural facilities, including railway siding, sustainability projects, and renewable energy generation.
The company further announced to acquire 54 per cent 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 transaction involves an outlay of around Rs 1,340 crore, comprising the takeover of existing debt and equity purchase.
"The Indonesian joint venture 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," said Abhyuday Jindal, MD, Jindal Stainless.
Elaborating on the investment, Tarun Kumar Khulbe CEO & Wholetime Director, Jindal Stainless said, "Investment in upstream facilities in Indonesia is a plug-and-play model which can be expected to get operational in the next 24 months given the existing industrial park facilities at the site. Logistics and power costs render Indonesia even more favourable to such investments. Besides, the Government of Indonesia has banned the export of nickel ore and is promoting investments into downstream facilities through long-term tax holidays.
The partnership in the Indonesian SMS, along with the downstream expansion in Jajpur and the acquisition of CSPL, is strategically aligned to enhance Jindal Stainless' overall facility. These investments are expected to significantly improve logistical efficiency to cater to increased planned volumes.
