Housing, infra sector creation augur well for steel: Sajjan Jindal
High inflation and firmed-up interest costs are other challenges that need to be addressed, says Sajjan Jindal
Mumbai: India’s economic growth is likely to receive a boost from the housing and infrastructure sectors, the head of JSW Steel Ltd said on Thursday in his speech at the annual general meeting of the company.
“After two consecutive years of sub-5% economic growth in India, the worst appears to be behind us and the economy is likely to pick up pace going forward," Sajjan Jindal, chairman and managing director of the company, said in a written speech.
“Housing and infrastructure creation are likely to be key focus areas for the new government and this augurs well for the steel sector outlook in India," Jindal said.
Still, several major challenges continue to bog the industry down, he said, citing the significant overcapacity in China which could suppress steel prices in the global market.
Local concerns include the low availability of iron ore with Odisha, the largest producing state of the mineral, clamping down on the sector to fight illegal mining.
“High inflation and firmed-up interest costs are other challenges that need to be addressed," Jindal said.
JSW Steel is the third largest Indian steelmaker after Tata Steel Ltd and Steel Authority of India Ltd (SAIL) with a capacity of 14.3 million tonnes (mt), but it has the most aggressive growth strategy looking at organic and inorganic means.
Speaking of the government’s target of boosting national production to 300mt by 2025, Jindal said it would require investment of $200 billion.
JSW’s own target of 40mt by 2025 would entail a capital outlay of around $22 billion over the next decade and the company is still committed to its new ventures in West Bengal and Jharkhand.
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