Jindal Stainless (JSL), the country’s largest stainless steel manufacturer, is planning to wind up its cold rolling mill in Indonesia as sales from the facility has become unviable following dumping from China. Separately, the firm have posted a 120% rise in consolidated net profit for the second quarter ended September 30, buoyant on domestic sales.
“There is severe dumping from China into Indonesia and the country’s domestic market is unviable for us. All the avenues are open right now as we are looking at either liquidating, exiting or selling off the facility,” MD Abhyuday Jindal told FE in an interaction.
The facility with a 12,000-tonne per month of cold rolling capacity is situated at Surabaya in Indonesia.
“We had set this up 16 years or earlier as we saw Indonesian domestic market growing and we wanted to export to the US and Europe from the country. Over time, China has totally dominated the Indonesian market, just like it dominated Indian market,” he said.
Further, many countries activating protectionist measures – the US has imposed a 25% duty and Europe 30-35% duty on Indonesian products – has also made sales into these markets unviable. JSL would now provide supply materials from India.
For Q2, JSL’s consolidated net profit rose to Rs 764 crore from Rs 347 crore recorded during the year-ago quarter, while net revenue rose 12% to Rs 9,797 crore from Rs 8,751 crore.
“Our domestic sales were up by 15% y-o-y. The growth came in from domestic markets, while exports were subdued,” Jindal said, adding China imports continued to ‘hurt’.”
JSL has lined up a capex of Rs 3,200 crore for this fiscal, which includes expenses for the earlier announced acquisitions of the remaining 74% in Jindal United Steel and 49% stake in Indonesia-based nickel pig iron firm New Yaking, among others.
“We might need to raise just about Rs 400 crore of debt, while the remaining would come in from internal accruals,” JSL Group CFO Anurag Mantri said.