Jindal Shadeed, an Oman-based subsidiary of Naveen Jindal-led Jindal Steel and Power, hopes to beat competition from China and other steel-surplus nations to get a significant...
Jindal Shadeed, an Oman-based subsidiary of Naveen Jindal-led Jindal Steel and Power, hopes to beat competition from China and other steel-surplus nations to get a significant pie in the Gulf Coordination Council (GCC) region’s $6-billion TMT bars market with its newly inaugurated 1.4 MTPA rebar mill here.
Following the acquisition of Shadeed Steel and Power in 2010 for $500 mn, JSPL has invested $700 m to set up a 2 mtpa steel melting shop (SMS) and the rebar mill. So far the company used to produce billets and other related products and sell them to local steel producers who would use them to produce finished products. With the rebar mill, which is the largest in the GCC region, Jindal Shadeed would sell TMT bars directly to the end-users.
Unlike other producers in the region, Jindal said, the company would have the edge when it comes to cost of production since its latest technology allows it to produce TMT bars directly from the hot metal that comes out from the SMS. The entire hot metal from its SMS would not be used for making TMT bars though, it would continue to sell some billets till the time it adds facilities for making other value-added products.
Jindal hopes to produce other value-added products in the coming future by setting up necessary facilities though he declines to give a time-frame, saying the focus of the company would now be on consolidation. Listing of the unit in the domestic bourses is also on the agenda, but it will all depend upon the market condition, which is somewhat subdued now due to present oil crisis.
The oil crisis has also forced the local governments to put a brake on investments on developing infrastructure, but Jindal is not apprehensive, saying that the demand for steel in the region is bound to grow further from the current level of 6-7% as all the investments do not necessarily come from the states. On top of all, the aim of the company would be to replace the burgeoning imports, mainly from China, with local produce and exports to other markets in Asia, Africa, Europe and the US.
China, Jindal said, has also been playing havoc with the local market, the same way it has been impacting the Indian market back home. Jindal said the local government should also take a cue from India and impose minimum import price (MIP) or other trade barriers on imports of steel products to help the domestic industry counter competition. GCC imports around 5 MT rebars a year.
(Travel for this report was sponsored by JSPL)