JSW Steel to hang on to its US units
13 May 2009
The Sajjan Jindal-controlled JSW Steel has denied reports that it is planning to sell its US-based units, even though its mills there are operating at only 10-15 per cent of their production capacity as demand has almost hit rock bottom in the stagnant US economy.
"We have no plans to sell our US pipes and plate-making plants. Looking at our forward integration, it is a right strategic fit for the company in the long run," JSW Steel joint managing director M V S Seshagiri Rao told PTI in Mumbai.
A media report on Monday said JSW Steel was open to selling its US plants at a price lower than what it paid to acquire them, to cut on its mounting losses.
The US arm of JSW Steel had in November 2007 bought the Texas-based mills, which produce plates and pipes, from Jindal United Steel, SAW Pipes USA and Jindal Enterprises for $810 million. The mills produce 1.2 million tonnes of plates and 0.5 million tonnes of pipes annually.
The company has deferred its plans to increase its pipe-making capacity by 500,000 tonnes. It is however optimistic that things will improve in coming quarters with the stimuli measures take by the US administration.
JSW Steel registered a 60 percent year-on-year growth in crude steel production for April, mainly on output from a recently commissioned expansion project, according to a company release. JSW produced 456,000 tonnes of crude steel in April compared with 284,000 in the corresponding month of last year.
The company has commenced commercial operation of the 2.8 million tonnes per annum expansion project at Vijayanagar from 10 April, it said.
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