JSW Steel Reports Strong Growth in April, Denies Sale of U.S. Operations
05/15/2009 - Reporting a 60% year-over-year growth in crude steel production in April, JSW Steel Limited denies the sale of any U.S. operation within the context of current market conditions.
JSW Steel Limited reported that it produced 456,000 tonnes of crude steel in April, reflecting a 60% increase over crude steel production in April 2008. The company said the robust growth in production was mainly attributable to the 2.8 million tonne/year expansion project at Vijayanagar works, which commenced commercial operation on April 10.
Commenting on the company’s U.S. operation, Seshagiri Rao, JMD & Group CFO of JSW Steel strongly denied any sale of U.S. facilities in the present market. He said the deep recession in the U.S. economy has severely impacted all sectors, including steel, which has deteriorated to capacity utilization rates of less than 50%.
Following its Plate and Pipe mills acquisitions in November 2007, JSW turned these units around, reporting EBIDTA of USD 46 million in the first five months of operations through March 31, 2008. For the first six months of fiscal year ‘08-09, the company has reported further EBIDTA of USD 75 million. Rao noted that the acquisition is a strategic fit to JSW’s long-term objectives of forward integration.
He also noted that the severity of the current economic downturn has forced user industries to delay projects in the oil & gas sectors, particularly in the U.S. Within the context of these exceptional circumstances, the company’s U.S. operations’ results are in line with current industry trends, with low capacity utilization of just 10 to 15%.
The company expects that U.S. operations will pick up soon as the recovery starts over the next few quarters following the massive simulative package announced by the U.S. administration. In India, JSW Steel India gave guidance of 72% growth for the fiscal year, based on robust domestic demand. The company said it is well positioned to benefit from significant volume growth and falling input prices.
JSW Steel Ltd., belonging to JSW group, part of the O P Jindal Group, is one of the lowest-cost steel producers in the world. Steel Limited is engaged in manufacture of flat and long products including hot and cold rolled coils, galvanized and color-coated products, auto grade / white goods grade CRCA Steel, Bards and Rods. Incorporated in 1994, JSW Steel Limited has the largest galvanizing and color coating production capacity in the country and is the largest exporter of galvanized products with presence in over 74 countries across five continents.
