JSPL sees 'very good reason' to consider RINL, NMDC: MD Bimlendra Jha

State-owned companies marked out for divestment are attractive assets, he says in interview

The government has set the ball rolling for the strategic disinvestment of NMDC’s steel plant in Chhattisgarh’s Nagarnar. Separately, it is in pre-bid consultations with the industry for the proposed disinvestment of Rashtriya Ispat Nigam Ltd (RINL), India’s first shore-based integrated steel plant in Visakhapatnam, Andhra Pradesh. Bimlendra Jha, managing director of Jindal Steel & Power (JSPL), told Ishita Ayan Dutt in an interview that RINL and NMDC are attractive assets with competitive advantage.

Here are edited excerpts from an interview.

What is the outlook for steel in the New Year?

We are more into long products but we have plates as flat (steel). And plates have been doing very well. There is a push for infrastructure and construction in the country. Also, with China lifting Covid restrictions, the international market has firmed up in the last one week. As far as India is concerned, from now on, we will see a strong period. Usually, Q4 is a stronger quarter for most players. This is also the time when most budgetary allocations are utilised.

Do you see prices increasing in January?

I don’t try to second-guess prices. Instead, I would look at demand. Demand is going to be stronger and as far as JSPL is concerned, we are on a strong wicket.

Given your expectation of a strong demand, can you give a timeline for JSPL expansion?

Our expansion is already underway, which will take Angul (in Odisha) capacity to nearly 12 million tonnes (mt). We have 3.6 mt in Raigarh (Chhattisgarh). So, 15.6 mt is the capacity that we should be having by FY24.

What is your vision for 2030 when the country is targeting 300 mt capacity?

After achieving 15.6 mt capacity, we will have six or seven more years to expand further. The capacity and configuration for this is still under consideration. But we have the ambition to build the world’s largest single location steel plant which will take Angul beyond 25 mt. So, somewhere between 27-30 mt capacity is what we should have because some expansion will also happen at Raigarh. But it’s still on the drawing board.

JSPL’s focus has been on long products. With the expansion, what kind of capacity will you have in flat steel?

We are more on the long-products side. With the current expansion of flat products (in Angul), there will be a balance. In future, we have to see how construction demand is being fulfilled because we would continue to focus on that segment—whether it comes from flat or long products is immaterial. Our product portfolio will continue to expand more and more in construction steel. But we are coming up with a hot strip mill and cold rolling. So, we will make a foray into white goods and automotive steel.

Is acquisition going to be a part of your strategy to reach 30 mt?

At the right price, why not. M&A (mergers and acquisitions) is a faster route to growth.

Would you consider bidding for NMDC, RINL which are going to be disinvested by the government?

These are attractive assets and Nagarnar is close to home. Another (RINL) is a port-based plant, which means competitive advantage in terms of bringing the coking coal from outside and even iron ore if necessary. Also, exporting becomes easier. So, from a logistics perspective, it makes tremendous sense to have large steel plants on the coast. And future expansion possibilities are particularly good in the coastal plant. There is also complementarity with our product mix. So, we see very good reason to actively consider these opportunities.

The complementarily is with RINL because they are into long products?

RINL has higher complementarily in terms of the current basket. But it has also got future expansion potential because it has large swathes of land though the perimeter has not been defined very clearly. There have been consultations with the industry and we have given our views. Should we be able to acquire it, it will not just remain in long products. It’s just that it’s a more interesting location. But Nagarnar is also an interesting location from an iron ore perspective.