Jindal Stainless makes value-added products
Jindal Stainless, one of the largest stainless-steel conglomerates in India, is concentrating more on valueadded goods, as there is a lot of growth for stainless steel segment in the country. The steel giant is also investing in its Orissa facility for the same. “This is due to the growth happening in our country and we are aligning according to it,” Vijay Sharma, Senior Vice President, Head, Sales & Distribution (Domestic & Exports), Jindal Stainless Corporate Management Services Pvt. Ltd, said.
Founded by O P Jindal in 1970, the company ranks among the top 10 stainless steel firms in the world. Jindal Stainless has been a partner of the Indian Railways for more than 12 years and it is present almost everywhere. “Be it the wagons, coaches, metros, we are present everywhere. To give better service to our customers in automobile and railways, we also have a very strong distribution network,” he said.
With the target of increasing the per capita consumption in 2-3 years, the Haryana-based company plays a major role in building wagons and coaches at ICF. Sharma says that they are the right partners and are fully equipped for the forthcoming new products. “In any coach, there are multiple applications of stainless steel that includes body, underframe, sidewall, toilets, etc. Whatever stainless steel is required we have the customer base who are the vendors of railways. Our share in coaches is more than 70%. Total value on all railways put together is around 10,000 tonne per month which is around Rs 150 crore. This is the value of stainless steel only,” he said.
With the new Linke Hofmann Busch (LHB) coaches coming to India, Jindal will also be a part of it. Speaking about the demand for the new design by the Railways, he says, “It is not a new design. It was German design which the Railways have adopted. It has a unique design if there is a crash, the coaches don’t run into each other. Stainless steel is very critical in this. In one LHB coach there are around 11-12 tonne of stainless steel, either coil sheet form or the other. Around 3200 of such coaches were made so far and by 2020 this number will go up to 8000 coaches across India.”
The stainless-steel company expects its growth to be around the world 5%, whereas in India during the last 5 years growth has been more than 10%. The growth is in a very nascent stage and Railways plays a major role in it. “Growth in terms of volume is important. Revenue is also important, and it is based on the commodity index. It is the growth of the coaches and this growth is exponential in the next 4 years. In the next 2 years, the new product will get developed and again in the next 2 years it will get doubled. Our shares also will go up,” he added.
He said that some of the steel grades that Jindal produces for the Railways are very typical. They have invested a lot in these grades that the Indian Railways need. As the Railways is focusing to make in India and as a stainless-steel manufacturer, Jindal is supporting it. Adding more on the investment, Sharma said, “Stainless steel’s first capacity melting, and we have got 1.8 million tonne of it. Another capacity is for making products like hot rolling, cold rolling, and other complex features. This specific facility is used for a specific grade which the railways developed along with the industry. We have invested around Rs 60-70 crore for it. We are also in the process of new investments.”
With the total production for a
month at an average of 130 thousand tonne, Jindal supplies around 1011 thousand tonne per month to the Railways. This is around 70% of its current requirement. Being a private player, the steel company is agile, flexible and fully committed. As of March 2018, Jindal Stainless Group has an annual crude steel capacity of 1.8 MTPA and the group has an annual turnover of US $ 3.1 billion. The company holds a market share of 63% in India and also exports around 20% globally.
Over the past 2 decades, stainless steel consumption in India has moved away from the most primary usage in cookware/ durable to new value added categories of architecture, buildings, infrastructure and process industries. The change is following global pattern of countries where per capita incomes of developing countries are catapulting in line with developed countries. “The global per capita consumption of stainless steel is around 5 kg and in India, it is 2 kg. There is a huge opportunity as the per capita consumption might increase in India and it is still at a nascent stage across various industries. The process industries are lagging a bit, but as our GDP is growing we feel that per capita might increase.”
On the threat from aluminium, Sharma said that every element has its own advantages. There are 5 most important elements, namely stainless steel, aluminium, carbon steel, copper, and brass. Stainless steel is growing at 5% CAGR, while aluminium is half of this and carbon is much less. This mainly is due to the versatility of the material and multiple application variants it goes in. This is one of the main reasons that stainless steel is being accepted worldwide.
Speaking more about the Indian market, the spokesperson states that there are 2 different stainless steels in India, flat products, and long products. “Long products are used globally. In India around 20% of the products are long and 80% are flat products. The size of
flat products is around 2.4 million tonne per annum. Putting together with long products it is 3 million tonne per annum of production and consumption. As a country, India is the second largest producer of stainless steel in the world after China,” he said.
Apart from the railway sector the company has its presence in the automotive sector. In India, stainless steel in automobiles is primarily used for exhaust pipes and disc plates. A very few are used in high-end vehicles for seat belt buckle, door handle knob etc. In this segment, Jindal holds more than 50% share.
“In commercial vehicles, so far there is no compulsion from the government to use stainless steel in the exhaust. But with BS-VI they will be forced to use it. For high combustion and to ensure minimum pollution, stainless steel will be used as it is the only alternative. And, we have started an initiative, in converting the traditional bus body which used to be in carbon steel and has less life to convert it to right grade of stainless steel. Many more of such initiatives are being carried out. With this, there is no requirement of paint also,” Sharma said.
Speaking about the difference between Indian and other country’s steel, Sharma says that in every country the local player should always get a premium. Chinese people dump and disrupt the market. “We are exporting about 20% and with this, we are able to benchmark ourselves with best players in the global market. We are just a notch below them. Indian market is where we are and our passion is here,” he said.
Stainless steel is an alloy of steel with chromium content by mass of minimum 10.5% having corrosion resistance properties and produced in induction furnace. Along with chromium, other metals like nickel & molybdenum are added to enhance properties like hardening, corrosion resistance, heat treatment, machinability, etc. Stainless steel has a wide range of applications - cookware, medical instruments, razor blades, highend applications in seamless tubes for process industries, thermal power, automobiles, building & construction, railways, etc. It has been the fastest growing metal over the past 4 decades, surpassing all the other important metals/alloys by a significant margin.