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Jindal Strips to set shop in Middle East
Tuesday, 08 October 2002, 19:30 IST
NEW DELHI: Indian stainless steel major Jindal Strips Ltd (JSL) is mulling a new cold rolling mill in the Middle East.
"We are looking at opportunities in the United Arab Emirates (UAE) and other Middle East countries to set up a cold rolling mill for production of stainless steel," Harsh V. Mishra, the company's vice president (corporate planning), told IANS here Monday.
Jindal Strips hopes to set up a 60,000 capacity plant in the UAE with an investment of around $100 million, he said.
"We plan to take advantage of the infrastructure facility, easy access to raw material, ready power availability, port facility and favourable tax regime in UAE."
Speaking on the sidelines of an investors' meet organised by the Confederation of Indian Industry (CII) for a visiting delegation of Jebel Ali Free Zone Authority, Mishra said his company sees the Middle East as an ideal location for expansion.
"We plan to set up a 60,000 tonnes cold rolled mill in the Middle East, preferably the United Arab Emirates, to be closer to our markets in the region and Europe," said Mishra.
The flagship company of Jindal Group is seeking 25 acres of land and ready availability of 1,500 MW power for the new plant.
Comparing the advantage of setting up operations in a free zone in the UAE as against a special economic zone in India, Mishra said there are a lot in favour of the former due to the ready availability of raw material and cheaper and reliable power, which reduces operational costs.
"Besides lower cost of production, there are lots of other advantages in terms of tax concession."
"While any of the new special economic zone projects are yet to be completed in India, the existing upgraded free zones of India do not offer the tax exemptions as in the case of Jebel Ali Free Zone (JAFZ)," he said.
The fact that JAFZ allows duty free import of raw materials, which after value addition can also be sold within the country is an attraction for investors unlike India, where domestic sale would attract import duty, with the free trade zones being deemed as separate territory for taxation.
"Dirham is a convertible currency and there is no restriction on repatriation of capital or profits, which is an advantage," Mishra said.
On the UAE's restriction on polluting industries, Mishra said a cold rolled mill is not a highly polluting industry. With proper effluent disposal system the pollution problem can be tackled, he said.
Two years ago Jindal Strips acquired stake in U.S.-based Massillon stainless.
With a 66 percent stake, acquired with an investment of around $3 million, the 60,0000 tonnes per annum (tpa) Massillon company has enabled Jindal Strips to get a foothold in the U.S. market without attracting anti-dumping duties.
Within India, the Jindal Group has a melting capacity of 250,000 tpa, hot rolling capacity of 300,000 tpa and a cold rolling capacity of 30,000 tpa that is being expanded to 90,000 tpa.
Source: IANS
Source: IANS