Jindal Saw to Set Up 300,000-Ton Steel Mill in Gujurat

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Researched by Industrial Info Resources (Sugar Land, Texas)--Jindal Saw Limited (BSE:500378) (New Delhi) is in the process of setting up a 300,000-ton-per-year steel mill in Mundra, Gujarat. The facility will also contain a 300,000-ton-per-year blast furnace and a 200,000-ton-per-year coke oven. The project is estimated to cost $250 million, which will be funded through internal accruals of the company. The steel produced at the mill will feed its seamless steel pipe-manufacturing unit, which is also located in Mundra. Jindal Saw owns a sufficient amount of land near the pipe unit for the steel plant, and will save in terms of transportation costs. Orders for the equipment have been placed and construction at the site is scheduled to start by year's end. The project is expected to go on stream in the first quarter of 2010.

The capacity of the seamless pipe plant at Mundra was recently increased from 80,000 tons per year to 250,000 tons per year at a cost of $87 million. Jindal Saw is procuring raw material steel for the pipe plant from both domestic and international producers. The firm is looking to ensure self-sufficiency in the supply of raw material through the proposed steel mill. Jindal Saw also manufactures pipes in Kosi Kalan, Uttar Pradesh, and Nashik, Maharashtra.

Apart from this backward integration venture, the company is diversifying into shipbuilding through a new company, Jindal Shipyards, which will be part of Jindal Infrastructure Transportation and Fabrication. Jindal Saw plans to establish the India Maritime Technology Park, India's first shipbuilding and repair hub in Gujarat, where the company will also manufacture equipment for ships, shipyards, ports and terminals in collaboration with overseas partners. In the first phase of this project, Jindal Saw will build 15 vessels of 15,000-ton capacity and 10 vessels of 5,000-ton capacity. Construction of the first vessel is scheduled for completion by the end of 2010. The entire project will be completed in three phases over a period of seven years at a total cost of $2 billion.

Jindal Saw is owned by the $10 billion Jindal Group. The Indian operations of Jindal Saw comprise three strategic business units. The large-diameter pipes unit manufactures large-diameter submerged arc pipes, spiral pipes and bends for the transportation of oil and gas in the energy sector. The seamless tubes unit manufactures carbon, alloy and stainless steel seamless pipes and tubes for industrial applications, such as boilers, bearings, hydraulic cylinders and generic engineering equipment. The ductile iron spun pipes unit manufactures ductile iron pipes for water and sewage transportation. Jindal Saw also has a separate strategic business unit that caters to the marketing of its products in the United States.

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