Jindal Stainless Steel, a leading stainless steel maker in the country, is expecting a growth in its supplies to the kitchenware industry with the implementation of the goods and services tax (GST), which has brought in more unorganised players into the organised market. The company said that its expansion plans are also taking this growth into consideration.
The market size of Indian stainless steel flat products is estimated to be 2.5 million tonnes per annum, which is growing at a steady rate of 9-10 per cent per annum. The kitchenware segment accounts for around 1 million tonnes per annum, almost half of the stainless steel flat products demand in India.
Although India is a large exporter in the kitchenware segment, its competitiveness is marred by a glut of cheaper imports from China, says the company. Almost 80 per cent of the kitchenware market has been covered by unorganised players using imports from China. However, with the implementation of GST and e-way bill, the company is expecting more players to come into the organised segment.
At present, the company enjoys supply to around 35 per cent of the organised market.
"We are in the process of installing infrastructure and will have dedicated capacities to meet the enhanced quality and quantity requirements. We intend to triple our share in the next two years," said Vijay Sharma, senior vice-president and head of sales and distribution (domestic and exports), Jindal Stainless Corporate Management Services Pvt Ltd.
The company is operating at full utilisation levels and currently looking at expansion by increasing the steel melting shop's capacity from 0.8 MT to 1.1 MT, an increase of around 38 per cent, through de-bottlenecking and process improvement by end of FY19. This capacity increase is possible with a fraction of the capital expenditure (capex) of about Rs 500 million, which is meant for increasing production to around 20 per cent in the next two years. At present, the company's focus is to expand to 1.1 MT. Once the operations are stable, it will plan further expansion. In Odisha, it has ready availability of land, basic infrastructure and other utilities to create much larger facilities. With this, the company will double the melting capacities to around 1.6 MT with a capex of Rs 4-4.50 billion.