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Unprecedented surge in imports hurting steel industry: Sajjan Jindal

An unprecedented surge in imports is hurting and causing harm to the domestic steel industry, said Sajjan Jindal, chairman and managing director, JSW Steel.

Jindal, while addressing its 21st annual general meeting (AGM), alleged that this harm is being caused because steel is being sold at a price significantly lower than the domestic home-country prices of exporters.

“While cheap imports may benefit user industries in the short-term, surely reliance on imported steel cannot be a sustainable business strategy,” he said.

The company’s net profit (profit after tax or PAT) has increased by 62.3% last year – from Rs 1,335 crore in 2013-14 to Rs 2,166 crore in 2014-15. However, its net consolidated debt also increased by 5 percent to Rs. 35, 808.11 crore in last year – making it one of the most heavily indebted companies in the segment across the globe.

According to Jindal, the outlook for the domestic steel industry remains robust and the prospect of capital investments are bright, subject to, however, the timely intervention by policy makers to remove the constraints faced by the industry.

“These include ease of doing business, land acquisition, environmental clearances, resource allocation, availability of finance at competitive rates and infrastructure bottlenecks, among others,” he said while addressing the AGM audience in Mumbai. “An important step in this direction is the Mines and Minerals Development and Regulation (MMDR) Amendment Act, 2015, recently passed by Parliament, which enables inter alia a transparent auction of iron ore mines.”

JSW Steel, which is the one of the country’s largest steelmaker, will ensure that it has the edge by improving its operating efficiencies through enhancing yields and reducing specific energy consumption, said Jindal.

The company, in last year, has shown a 4% growth in steel production. Moreover, its sales of value added and special steel products grew by 38% over the previous year and comprised 33% of total sales.

In 2013-14, the contribution of such special steel products was just 24% of total sales.

“Our investments in next generation downstream facilities enabled us to enrich our product portfolio and fully leverage the available opportunities in the automobile, consumer durables and construction sectors,” commented Jindal.
Source: Business-Standard