Jindal Steel to enter container making biz to address domestic shortages

The company plans to manufacture containers at a price point lower than the landed cost of imported boxes

Naveen Jindal-led Jindal Steel & Power (JSPL) will soon be foraying into the container manufacturing business and is setting up a facility either at Odisha or in Chhattisgarh.

“The decision has been taken just last week. For us, it is a downstream product and we already make the kind of speciality steel needed for manufacturing containers. We also have the technology and, hence, foray into this segment will not be difficult,” V R Sharma, managing director, told Business Standard.

India has no container manufacturers. The biggest container manufacturer in the world is China.

The Ministry of Ports, Shipping and Waterways has recently formed a committee to examine feasibility of making containers at Bhavnagar in Gujarat and developing it into a manufacturing hub for the steel boxes.

Since the past few months, uneven import-export scenario for India has led to severe shortage of container boxes pushing costs of the same.

After Chinese imports came under scanner and bans were placed, the there has been a severe dearth of containers in the domestic market.

Earlier, Balmer Lawrie, Hyundai, and Nathani were among the few manufacturers in India. These players went out of business after China started producing containers at a much competitive price of $1,000 per unit as against $1,800-2,000 per unit manufactured domestically.

“Our product price will be same as that of landed cost of container. But we will lower this price as we have the advantage of housing the widest steel strip mill in the country,” Sharma said. Steel strips produced by this mill are wide enough to bring down at least three processes needed in the making of these containers, leading to lower cost of production.

At present, India sources its entire container needs from China at Rs 239,760- 454,545 per container.

The firm on Thursday reported a consolidated net profit of Rs 2,566 crore in the December quarter against a loss of Rs 218.57 crore in the same period last year on the back of increased revenues.

The top line stood at Rs 10,533 crore in the period under review, up 40 per cent from the same period last year due to increased volumes as well as realisations.

Consolidated earnings before interest, taxes, depreciation and ammortisation (Ebitda) in the December quarter stood at Rs 4,252 crore against Rs 1,574 crore in the corresponding period last year.

The New Delhi-based primary steel producer with a capacity of 7 million tonne reported consolidated net debt of Rs 25,621 crore.