|Mr. Vijay Sharma
Founded in 1970, Jindal Stainless is one of the largest stainless-steel conglomerates in India and ranks amongst the top 10 stainless-steel conglomerates in the world. Mr. Vijay Sharma, the Director of the group, shares his insights on the stainless-steel market and the Indian construction industry.
Civil Engineering & Construction Review: How do you think the government’s big decision of slashing corporate tax will impact the stainless-steel sector in the near term?
Vijay Sharma: This incentive will not only contribute to ease of doing business in the nation but will also attract foreign investments in brown-field and green-field projects, thus spurring economic growth. The step will ensure free cash flow, meanwhile enhancing employment. The domestic stainless-steel players need to capitalize on the increasing stainless-steel demand in India, currently growing at a CAGR of 8-9%. The domestic stainless-steel industry welcomes this affirmative policy initiative by the government and believes that this decision will give a fillip to plans of diversifying or adding capacities.
CE&CR: What are the stainless-steel products offered by your company for construction?
Vijay Sharma: As India’s largest fully integrated stainless-steel manufacturer, Jindal Stainless is currently producing for all major sectors including Architecture, Building & Construction (ABC); Automobile, Railways & Transport (ART); process industries and white goods. The company produces world-class stainless-steel coils in both hot-rolled and cold-rolled forms, sheets, coin blanks, and precision strips. The company is the world’s largest producer of stainless-steel strips for razor blades and India’s largest producer of coin blanks, serving the needs of Indian and international mints. As market demand for more durable, aesthetic, maintenance-free, and sustainable materials is on the rise, stainless-steel products are now being widely used in civil construction and infrastructure. Moreover, stainless-steel is innately strong and is an all-weather material. Ease of fabrication and range of surface finishes give stainless-steel an edge over other materials.
Jindal Stainless has been making dedicated efforts in stainless-steel ornamental pipes and tubes segment which are generally used in handrails, balcony railings and gates. We have recently launched co-branded stainless-steel pipes and tubes with domestic pipe and tube manufacturers with the aim of curbing substandard material in the market. The company is catering to an increasing demand for stainless-steel roofing, interior, architectural cladding, lifts, elevators, etc. is also witnessing an increased demand.
We are also producing for prominent stainless-steel structural applications like bridges, flyovers, and foot over-bridges in the urban civil infrastructure. This new age infrastructure like metro extensively uses stainless-steel as its basic material. Major economies across the globe use stainless-steel in construction sectors more aggressively than India. Therefore the potential for stainless-steel growth in this segment is immense.
CE&CR: How do the cheaper stainless-steel imports impact the Indian industry?
Vijay Sharma: India is the second largest consumer and producer of stainless-steel in the world. The metal has registered the highest growth rate in India as compared to rest of the world, with the per capita consumption of stainless-steel at ~2.5 kg. However, this is almost half of the world average. This underlines that India is a distant second (as compared to China) and thus, holds immense potential for stainless-steel growth. This makes India an attractive market for stainless-steel producing nations across the globe. Moreover, nations like China and Indonesia have excess manufacturing capacities installed. This has resulted in high level of imports, which have been plaguing the domestic stainless-steel industry. Further, a surge of imports from FTA (Free Trade Agreement) countries like ASEAN, Japan, Korea, etc. have added to the plight, amounting to be ~60% of the total imports in India. This has not only affected the domestic industry but has also bruised the exchequer. We thank the government for its resolution of opting out of the RCEP pact and further request the authorities to terminate FTAs in the interest of the domestic manufacturing sector.
It is pertinent to note here that the domestic industry has adequate stainless-steel manufacturing capacities installed to meet the domestic stainless-steel demand.
Stainless-steel imports remain one of the biggest challenges for the domestic industry. As a result, capacity utilization of domestic industry is at around 55% of the total installed capacity. According to data from the Ministry of Commerce, the total stainless-steel imports during FY 2018-19 increased by ~7% as compared to FY 2017-18, with imports from Indonesia rising by ~1100% during this period. The Indonesian import continued to ramp up to nearly 3000% during H1 FY 19-20 as compared to FY 2017-18. Moreover, due to sub-standard low priced imports, the market pricing of goods in the domestic market is distorted.
Over the years, the domestic industry has paired up with newer technologies to produce world-class quality stainless-steel products. Consequently, the Indian stainless-steel products today have a global acceptance.
CE&CR: What are your views on increasing per capita stainless-steel consumption in the country?
Vijay Sharma: India recently achieved a milestone of an enhanced 2.5 kg per capita consumption of stainless-steel in the country, against 1.2 kg per capita in 2010, registering an increase of over 100% in a period of just eight years. Henceforth, India ranks among top 15 countries in the world in terms of per capita consumption of stainless-steel. An ascending stainless-steel demand in diversified applications such as ABC, ART, process industries and white goods, apart from conventional use in kitchenware and utensils, has led to this increase. It is noteworthy that the metal has consistently evolved over the past three decades across all parameters, including production, R&D, and consumption patterns. With a ~100% recyclability, impeccable corrosion resistance, and low life cycle cost, stainless-steel is an indispensable metal for diverse sectors including railways, metro projects, bridges, nuclear projects, transportation, heavy machinery, kitchenware etc. We look forward to working towards achieving an even better figure in the coming years.
We are also actively working with the Ministry of Steel, Government of India, and Indian Stainless-steel Development Association (ISSDA) to promote stainless-steel usage where single-use plastic can be replaced with stainless-steel. We are committed to enhancing the per capita consumption of stainless-steel by developing stainless-steel water tanks, water pipelines, and e-rickshaw body frames and components along with relevant stakeholders.
CE&CR: Jindal Stainless recently conducted a fabrication training program for Varanasi Central Jail inmates. What other initiatives are being taken to teach skills and ultimately, enhance employment?
Vijay Sharma: In consonance with the Government’s rehabilitation program for prisoners, Jindal Stainless recently facilitated a stainless-steel fabrication workshop for the jail inmates at Varanasi Central Jail in order to equip them with a skill and to ensure employment opportunities for them once they complete their prison term.
Stainless-steel fabrication requires different expertise as compared to handling mild steel or aluminium. Therefore, Jindal Stainless is committed towards up-skilling the Indian youth and carries out training workshops across Indian cities. The workshops entail expert training on welding, cutting, and fabricating stainless-steel along with equipping the masses with the correct knowledge and techniques of stainless-steel grade selection as per the application requirement. As of now, Jindal Stainless has trained ~10,000 fabricators. Also, through our specially designed stainless-steel showcase vans, we exhibit various stainless-steel applications in different cities.
Jindal Stainless also works to uplift the weaker sections of the society. The company, under its CSR banner, works towards enhancing various skills among communities in order to sustain their financial independence. The courses include dress designing, fashion technology, beauty culture, stitching, and tailoring.
CE&CR: In the beginning of 2019, Jindal Stainless expanded its stainless-steel footprint in the kitchenware segment to cater the demand from eastern India. Which other areas are you planning to look for expansion?
Vijay Sharma: While we are already present in all the segments, Jindal Stainless has also aligned itself with the government’s initiative of ‘building the nation’. Recently, the company marked its advent in the stainless-steel structurals for railway infrastructure. The bridge infrastructure of the nation has been compromised with poor quality material for years. This has even resulted in severe accidents and casualties. Aligning its efforts with the mega modernization plans of the Indian Railways, Jindal Stainless recently signed an MoU with Braithwaite & Co Limited, a Government of India undertaking under the Ministry of Railways, to develop stainless-steel foot-over-bridges (FOBs), rail-over-bridges (ROBs), etc. across the nation. Apart from this, the company is also focusing on improving logistics including infrastructure and waterways with stainless-steel.
CE&CR: Please share your views about the growth of the stainless-steel industry in the last decade.
Vijay Sharma: Evolution of the Indian stainless-steel demand over the last decade has witnessed a significant change; from humble beginnings in the unorganized utensil segment to quintessential economic fronts like nuclear, defence, ABC, ART, and energy generation applications. This translates into an indigenous cultivation of stainless-steel applications using indigenously produced metal. It is noteworthy that the developed nations, in the past, have followed a similar growth trend with stainless-steel applications. This justifies that Indian economy is on the right trajectory and is using the right means. Also, this unveils the adaptive nature of stainless-steel as per industry requirements. The exceptional nature of stainless-steel as a resource to be used in numerous applications boosts economic growth. Globally, India has marked its presence as one of the most quality-conscious stainless-steel producers. This is testified by the fact that Indian stainless-steel products are exported to quality conscious markets in Europe and US.
CE&CR: What are your prospects and plans going forward?
Vijay Sharma: Jindal Stainless recently increased its cold rolling capacities in its manufacturing units. The company is in the process of increasing the melting capacity at its Jajpur facility from 0.8 MT to 1.1 MT through de-bottlenecking, process balancing, and a capex of around Rs 40-50 crore, which will result in a production increase of 12-15%.
We are also focusing on increasing the capacities of value-added products. With an estimated capex of about Rs 170 crore, the company is doubling its precision strips’ production capacity. This is expected to commission within FY21. We are also evaluating inorganic growth options. So, overall, Jindal Stainless has good options for both, brown-field expansions, and inorganic growth.
We also plan on developing a stainless-steel downstream park in Jajpur, Odisha. We have proposed the state government to develop this park in an area of 300 acres. This project promises immense potential for downstream industries (pipes and tubes, re-rollers, rice mills, general fabrication, etc.). The park will accommodate more than 90 downstream units as well as one or more anchor investors for need-based re-rolling and service centre facilities.