New Delhi: Jindal Stainless, India’s largest stainless steel producer, has decided to go slow on its Rs2,887 crore ($600 million) overseas projects, while delaying the Rs10,000 crore expansion plan in India following a slump in demand for the alloy amid global economic slowdown.
“With demand for stainless steel going down, we would now go slow on the overseas projects and delay commencement of the proposed integrated plant in Orissa by a year,” Jindal Stainless director (Corporate Affairs) N. C. Mathur said.
The company has proposed setting up a 2.6-lakh-tonne ferro-nickel plant in Indonesia and a 60,000-tonne ferro- chrome unit in Vietnam. It is also in the process of setting up a 1.6-million-tonne integrated stainless steel plant in Orissa.
Jindal Stainless Ltd (JSL) has already invested about Rs3,000 crore for putting up a 4.5-lakh-tonne coke oven, 2.5 lakh tonnes ferro-manganese and ferro-chrome units besides a 250-MW power plant as part of the first phase of the proposed project in Orissa.
The company further plans to pump in about Rs6,000 crore to reach a production capacity of 8 lakh tonnes and then 1 .6 million tonnes in the third and last phase with an additional investment of around Rs1,000 crore.
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JSL had earlier planned to reach the optimum production capacity by 2010, which has now been delayed to 2011.
“The plant in Orissa is primarily meant to cater to the global market, but as demand for stainless steel is on a low amid the financial crisis, we have delayed commissioning of the optimum capacity by a year to 2011,” Mathur said.
With stainless steel demand declining world over and leading to piling up of inventories, JSL has approached the government for initiating anti-dumping duty on shipments of the alloy from countries like China.
Accepting the company’s plea, the Commerce Ministry has initiated a probe into alleged dumping of stainless steel items and has sought the industry’s response to it within 40 days, which is set to expire this month.
Even as JSL wants protection against cheap imports, the downstream industries and end-users of the alloy, including utensil manufacturers, are against any restrictions as they say it would lead to monopoly of a single producer.
To hear the contentions of the two sides, the steel ministry had convened a joint meeting in the last week of December.
The ministry is likely to finalise its stand on fiscal measures that could be taken in the interest of domestic stainless steel producers and importers within a week.