JSW Steel to invest $500 mn in US ops
JSW Steel Ltd said on Monday it would spend $500 million to build out its US operations in Texas, amid heightened global trade tensions following US President Donald Trump’s decision to pursue steep import tariffs.
The company has signed an agreement with the Texas governor’s office, under which the governor has approved a grant worth $3.4 million to the company’s unit, the steelmaker said in a statement.
The unit, JSW USA, sells highquality carbon plates to the energy, petrochemicals, defence and other heavy equipment industries.
The company will use $150 million of the funds to improve and modernise its plant in Baytown, Texas, while the rest will fund a new facility, it said.
“The Texas plant has been struggling for a long time,” said Motilal Oswal Securities analyst Sanjay Jain.
“Basically the company is going to do some backward integration, which is a good idea considering that US is surplus in steel scraps, and imports are higher considering the recent tariffs. So that makes the case for investment.”
The unit produced 59,623 net tonnes of steel plates at a capacity utilization of 24% and 15,109 net tonnes of steel pipes at an 11 percent utilization, in the quarter ended December 31.
“Access to natural gas at extremely economical prices and the abundant availability of scrap steel in Texas make conditions very conducive for manufacturing through the Electric Arc Furnace Route,” said Parth Jindal, director of JSW USA and son of JSW group chairman and managing director Sajjan Jindal.
The investment will be made in phases and the capex plan is expected to completed by March 2020.
Earlier this month, US President Donald Trump pressed ahead with import tariffs of 25% on steel and 10% for aluminium, raising the prospect of a global trade war.
Six trade partners, including Canada, Mexico and the European Union were later excluded from the higher import duties until May 1.
BENGALURU:
Niranjan Hiranandani’s family is investing around ₹3,500 crore to build liquified natural gas (LNG) terminals in Maharashtra and West Bengal, in a diversification for the Mumbai developer who built the iconic 250-acre Hiranandani Gardens township in suburban Powai.
Led by Darshan Hiranandani, Niranjan’s son, H-Energy (formerly known as Hiranandani Energy) expects to start commercial operation of its first LNG terminal at Jaigarh in Maharashtra by October. The Hiranandanis are spending around ₹1,700 crore in setting up the terminal and laying down a 60 km pipeline from Jaigarh to Dabhol that is expected to be ready by May 2018.
“It is a big diversification of the group. If it succeeds in the way he (Darshan) plans to do, in five years’ time, he will be bigger than me in terms of volume of turnover at least,” Niranjan Hiranandani said in an interview.
The energy venture operates as a subsidiary of Niranjan’s realty firm Hiranandani Communities, which primarily focuses on building large townships across Maharashtra.
The company is planning to start construction of its second LNG terminal at Digha in West Bengal with an investment of another ₹1,700 crore. “It is an ambitious plan. There will be gas to Kolkata and even Bangladesh... all those tie-ups are all in the offing. Most of the permissions are there. We are working on the structuring and other things,” he said.
MUMBAI: