India’s largest private steel maker JSW Steel is eyeing export markets such as South America, Mexico and Chile to keep its US subsidiary — JSW Steel USA —afloat. The US subsidiary, which is operating at 10-15% production capacity currently, will start exporting steel plates and pipes to the other American markets from next year after meeting domestic demand, JSW Steel managing director Sajjan Jindal said.
“There was a dearth of orders last year after the financial crisis led to the recession in the US. But we are seeing a revival in demand from construction and automobile sectors in the country and have received some orders too,” Mr Jindal said, adding that the US subsidiary will increase its capacity utilisation once it starts exporting to overseas markets. JSW Steel’s steel plate and pipe mills in Texas has the capacity to produce 10 lakh tonne steel plates and 5 lakh tonne pipes every year.
So far, the company has received orders for two lakh tonne plates and one lakh tonne pipes. Asked about the financial position of the US subsidiary, Mr Jindal said, “We intend to bring down losses of the firm to $25 million this year from $60 million last year by adopting various cost-cutting measures.” The Mumbai-based steel firm had acquired the US steel plants in August 2007 from Jindal Saw, which is owned by elder brother Prithviraj Jindal.
JSW Steel was planning to export steel slabs from its Indian facilities to the US plants for converting these into pipes for the American oil and gas industry. But with the slowdown hitting the US economy hard, the company was forced to cut production in the US and shelve these plans.
Earlier, there was speculation about JSW Steel putting its plants in the US on sale because of a sharp fall in demand triggered by the global economic slowdown. Since the economy has started showing some signs of revival, JSW Steel intends to go ahead with its previous plans of exporting slabs from India to the US. Earlier, the company had almost halved its workforce at its US steel mills to remain competitive in the current scenario.