JSW bid only for rolling plant of Luchini

Italian steelmaker, Piombini, had reportedly confirmed that it had received a binding offer from JSW Steel and was considering offer

The binding bid by JSW Steel is for the three rolling mills of the Piombini plant of Luchini SpA and not any other assets, a senior executive of the company confirmed on Friday.

“The bid is only for the rolling mills and not for the blast furnace,” clarified Sharad Mahendra, senior vice-president-global sales at JSW Steel. The rolling mill has a capacity of 1 million tonne. The Italian steelmaker had reportedly confirmed that it had received a binding offer from JSW Steel and was considering the offer. Declining to divulge the amount of the bid, Mahendra said that the issue of employabilty of the workers at the plant was being discussed between the two parties. He also expected the issue to be resolved soon. “ The Government of India is now involved in it and we expect it to get solved soon,” he said.

Luchini’s trade union has expressed concerns over the aquistion and had asked the bid to include wider operational area including the blast furnace so that most of the workers could be retained.

Terming this as a long term investment plan by the Sajjan Jindal-led group and the plant is being aquired mailnly to cater to the demand of the European automobile industry, he also said that the the the company had a target of 12.5 million tonnes production this financial year.

He added that the prospects would have been brighter had the problem of iron ore shortage could be solved. The Supreme Court ban on mining in several states has forced the Indian steel companies to export iron ore leading to higher cost of capital.

“It’s unfortunate that despite the Vijayanagar plant being situated very close to iron ore mines, we have been forced to export from Canada,” he said.