“JSPL Keen to Strengthen balance sheet”

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Jindal Steel & Power Ltd (JSPL) is a success story of revival, had its share of challenges and the company graph has made an upturn in its growth. It is seen in the Q3 results where the crude steel production stood at 0.97 mnt in Q3 FY18 compared to 0.89 mnt in Q2 FY18; registering growth of 9% on Q-o-Q basis. Also it has consolidated the net loss which narrowed by 39 % to INR 276.99 crore in the third quarter ended December 31.

Naushad Akhter Ansari has been Chief Executive Officer of Steel Business at Jindal Steel & Power Ltd. since October 4, 2017.Before he served as the Chief Executive Officer of Jindal Shadeed Iron and Steel – Oman. Prior to joining JSPL, he has worked with Tata Steel Limited, Jamshedpur, for about 34 years included General Manager of Projects. He served as a Whole time Director of Jindal Steel & Power Ltd since December 1, 2010 until April 27, 2012. He led a large workforce and had been responsible for several innovative practices. Under his dynamic leadership, various projects like SMS (Steel Melting Shop), Rolling Mills, Sinter plant, Blast Furnace, Raw Material Handling facilities and Power Plant etc. have been completed successfully.

In an interview with Steel360 Naushad Akhter Ansari Chief Executive Officer of Steel Business at Jindal Steel & Power Ltd talks about the future growth and the narrowing of debt and strengthening the balance sheet of JSPL.

Q1. How will Angul Plant add to JSPL’s steel production being India’s 4mnt blast furnace & what kind of cost saving is seen?

A1. With setting up of India’s largest blast furnace and commissioning of 250 Ton size BOF, the steelmaking capacity of JSPL, Angul has become 5 Million ton per Annum. Conventionally BF-BOF route of steel making is considered to be the most cost effective as compared to DRI-EAF route due to the fact that BOF uses chemical energy for steelmaking whereas EAF uses electricity which is again an expensive mode of production.

Q2. It is expected steel output will surge in 2018, how JSPL EBITDA will get affected?

A2. If you look at our past 4-5 quarters, you would see that we have maintained EBIDTA/Ton in the range of Rs. 9200 to 10,000.

Q3. JSPL has remained largest Indian pellet exporter in CY17; what are your expectations for CY18?

A3.Over the past 2 years, JSPL has been the largest Indian pellet exporter.

Q4. How do you plan to tackle JSPL debts as it has the one of the highest to equity ratios compared to other top steel producers?

A4. Based on current market conditions and subject to any un-anticipated changes, the company believes that it can meet all its committed & scheduled repayments. Also we will try and reduce as much debt as we can over and above that. We are very much focused to bring our leverage levels down and strengthen the balance sheet.

Q5. As a part of National Steel Policy there is going to be steep surge in domestic steel production by 2030; do you think it is dubious to achieve?

A5. Ministry of Steel’s National Steel Policy 2017 has set an ambitious target of achieving 300 MT by 2030. To achieve 300 MnT from current level of 120 Mnt in next 13 years, there would have to be a gradual increase in the capacity of Green fields and Brown fields. However there are various challenges like Land Acquisition and Raw material security that has to be addressed to achieve the target. As it is estimated that 300Mnt of production would require 480 MnT of iron Ore & 360 MnT of coking coal thus there would be huge logistics pressure to transport such quantities.

Q6. The consumption of Indian Steel is not par with the production as the production is rising higher is the last few years; what is your opinion on this situation?

A6. Demand is likely to grow and government is targeting steel consumption from current 61kg to 168 kg by 2030.Currently, the long products share is approximately 50% of the total finished steel production. The demand for long products would rise and may even exceed the percentage share by 2030 over flat products. Government’s key focus has been on Railways, Infrastructure, Energy (Oil & Gas), Steel, ports etc. The demand for long products shall emanate from these sectors. For e.g, GOI has planned an outlay for Railway Electrification, High Speed Corridors, and Metros across the nation, thus building a platform for higher demand of long products.