Jindal Vijaynagar Steel (JVSL), the O P Jindal group greenfield integrated steel plant, scheduled to go on stream later this year, is negotiating with major south-based hot rolled coil purchasers to create a captive consumer base for its production.
The company is in talks with TI Metals, Nagarjuna Steels, Pennar Steels, Balmer Lawrie, Cochin Shipyards, Automotive Axles, BEML and Prashant Cylinders.
The JVSL management has also decided to temporarily shelve the proposal to take on a minority partner for the project.
The company had been considering a proposal to offer a 10 per cent equity to one of its technical partners. This was to be done by issuing fresh equity as JVSL does not plan to dilute its own stake. The company has been in talks with British Steel and NKK, for this purpose.
We have put the issue of taking on a equity partner on the backburner, and is currently concentrating on the completion of the project, Sajjan Jindal, vice-chairman, said.
Jindals stand is in complete contrast to their earlier statements on the issue.
Last month, in an interview to this paper, Jindal had said that they had decided to divest around 10 per cent in favour of British Steel and this would be done by issuing fresh equity.
He had also said they were not willing to cede majority control.
British Steel, one of the global leaders in steel, has been closely working with the Jindal group for nearly a year, and has recently completed a major benchmarking exercise for Jindal Iron and Steel Company.
Besides technical support British Steel is to provide managerial support for JVSL.
JVSL will be mainly focusing on the southern region for marketing its products like HR coils, plates and sheets, S K Gupta, managing director of the company said.
JVSL has the advantage of being close to the main southern markets like Bangalore, Chennai and Hyderabad. It has carried out a detailed survey of the southern region to determine the market character.
The study found that the southern market was characterised by a wide segment base and a demand for customised products.
Based on its findings the company has decided to evolve certain segment specific standards for its products.
These standards will result in better yields and higher productivity for the customers, Gupta said.
The segments the company is targeting include cold rolling units, tube makers and general purpose customers for its HR coils, auto parts and ancillaries, coach and wagon builders, for its HR plates, and container manufacturers, LPG cylinder units and ship and barge makers for its HR sheets.
The company will shortly open marketing offices and stockyards at Bangalore, Chennai and Hyderabad. This will be supported by a network of dealers in up coming markets like Hubli, Mangalore, Goa, Belgaum and Gulgarga, Gupta added.
