Jisco Shelves Tarapur Project

Jindal Iron and Steel Company (Jisco) has shelved its plans to set up an organic-coated 1.25 lakh tonne sheet project at Tarapur in Maharashtra.

The move, according to Jisco, has been prompted by the uncertain outlook for organic-coated sheet in India besides the prevailing recessionary conditions in the steel industry. The Rs 150 crore project was a part of its forward integration step for galvanising operations.

Raman Madhok, joint managing director and chief executive officer, Jisco, said: "We have put the project on hold considering the sluggish market for organic-coated steel."

Recently, Jisco has acquired the 50 per cent stake held by British Steel Plc of the UK in JBS Steel Products, after the termination of the 50:50 joint venture company. The acquisition of the 50 per cent stake, representing 110 lakh equity shares of Rs 10 each, was through Sun Investments, a subsidiary of Jisco.

 

JBS Steel Products, now christened Jindal Coated Steel (JCS), proposes to dispose off all its assets constituting mainly land at Tarapur and colour coating line equipments, and the proceeds will be utilised for liquidation of amounts invested by Jisco in JCS. The estimated cost of the project at Rs 150 crore was to be funded jointly by the promoters and the financial institutions.

Meanwhile, Jisco has embarked on a restructuring exercise to streamline operations in the production process which would contribute towards cost reduction.

"From the procurement of raw materials to the despatches of the end product, Jisco is concentrating on every process parameter. The idea is to break the entire process into chewable bites," Madhok said.

The company has reduced intermediaries besides closing down its warehouses in Delhi, Hyderabad and Gaziabad, and have decided to hold inventory in its plants.

The company is also concentrating on a profitable product mix which would help optimise the conversion cost recovery. The restructuring of the marketing channel for sales is aimed at reducing sales and distribution cost, and enhance the overall net sales realisation.