With demand expected to pick up, JSW Steel, India?s third-largest steel manufacturer, is all set to increase its market share in the domestic market. Sajjan Jindal, vice-chairman and MD of JSW Steel, told Smita Joshi Saha about the company?s collaboration with Japanese player JFE Steel Corporation, his view on the second half of FY2010 and challenges involved in procuring resource assets. Excerpts…

With this collaboration it is very clear that JFE will participate in JSW?s upcoming greenfield projects in West Bengal and Jharkhand. Will JFE finance your greenfield projects or pick up some stake in your upcoming projects (like JSW Bengal)?

These are all part of our larger discussion that will take place over the coming months. Both companies have formed two strategic groups for this purpose and they would be taking a decision on how to go about it.

But is the stake sale and cash inflow by JFE a part of the discussion?

Yes. But right now the major discussion is on technology transfer. Also, there is a global thinking that there should be an equity stake that JFE will invest in JSW Steel and similarly, we will invest in JFE. We have restricted our discussion to that currently. JFE is also very keen to participate in the greenfield projects, but how that will happen has not been worked out yet.

When is the financial closure for the West Bengal project likely?

I don?t think the West Bengal project is waiting for any financial closure. We already have the assurance and support of State Bank of India for it. But we are currently not taking up that project because of two reasons. Firstly, the economic condition is still not very sound. The slowdown has impacted the whole business and we are yet to recover. Secondly, we are working to develop the coking coal and thermal coal mines we have got in West Bengal. We are first working on getting the raw material tied up completely.

The growing demand has put pressure on raw materials. How would you cope for resource assets in this rush?

That is one area of concern and a big challenge, especially when raw material prices are going up and steel prices are coming down.

What steps is JSW taking for it and what are the areas you are looking for acquiring coking coal mines?

The major coking coal assets are in Australia and the whole world is looking there for acquiring coking coal assets, which is not very easy. It has become very expensive too. It?s difficult, but we are looking at building our resource assets.

Despite strong steel demand, prices are expected to remain tight. What is the reason?

The domestic demand is strong, but domestic prices are linked to global prices. Right now, there is a huge pressure internationally on the prices.

What is your outlook for the second half of FY10 ?

The second half is looking quite exciting and good, especially as JSW Steel has kicked in expansion and new capacities have come in. We will see a growth in excess of 70%, which is a robust and strong growth for any steel firm.