India has the potential to be net exporter of steel: Sajjan Jindal

India has manpower, money, mineral resources, machine and market to take industry to 300 million tonne per annum by 2025

Though India's demand-supply equation for steel is almost balanced at present at about 80 million tonne, going ahead the country has the potential to become a net exporter of the alloy, Chairman and Managing Director Sajjan Jindal of JSW Steel said today.

He was speaking at the two-day FICCI-INSDAG Seminar on 'Steel- The Preferred Choice of Material for Construction' held here today.

"India has the five main 'M's that is manpower, money, mineral resources, machine and market which can make it a 300-million-tonne-per-annum capacity by 2025. Thus the country possesses the potential to become a net exporter in coming years," Jindal said.

"As the industry becomes more and more mature I see more value added products being exported," he said. "In FY14, India has become a large exporter for steel. This is a very positive thing for the industry,"he added.

Under the guidance of the steel ministry, the industry players are currently engaged in drawing up a plan to meet this national goal of 300 million tonne by 2025, said Jindal.

"Now that we (the industry) have the goal set it is important that the five 'M's move in the same direction which is not the case at present," he added.

Thrust will be laid on bringing new technologies and innovation will be encouraged, said Jindal. There is also a plan to set up a research and development centre which will bring out innovative tools for the industry, he added. "Currently the plan to set up an R&D centre is on the drawing board but we will soon come up with a concrete plan," said Jindal without specifying any timeline.

"While we (the industry) have set the goal for 300 million tonne per annum capacity by 2025, we do see several negatives on the way which one can say are the curses of development. But these negatives can surely be mitigated and development can happen even keeping environment and other aspects in mind," said Jindal.

Sajjan Jindal also expressed his dissatisfaction about role railways has been playing towards transportation of raw material for the steel industry. "Railways, which used to a play a very significant role earlier in transportation of raw material like iron ore and coal has not kept pace in the growth of the economy and infact has slowed down to 35 percent from 85 percent earlier. Due to this, the industry has to rely on road transport which works out to be costlier. Such things should not happen," he said.

On strengthening of backward integration of the industry, Jindal said,"Raw material security is our major concern and we have discussed this with the Prime Minister recently. Infact this was our main point of discussion apart from suggesting discouraging of exports of rich mineral resources like iron ore."

On the pricing scenario, Jindal sees global iron ore prices stablising at $100 per tonne in coming months due to over supply in the market especially since Chinese steel demand has peaked out. "The Chinese industry has peaked and so the new iron ore capacity coming in will put pressure on ore prices," he said.