Posted on 17 Oct 2011
Jindal Group, the Indian steel giant, is keen to expand its operations into Thailand as part of an effort to tap rising demand for value-added steel, key executives say.
V.R. Sharma (left), CEO of Jindal’s steel business, and John Elmore (centre), director for strategy and business coordination, say the return of political stability is a big plus for Thailand.
"We are very interested in Thailand in various fields," John Elmore, Jindal's director for strategy and business coordination, told Nalinee Taveesin, the Thai Trade Representative charged with looking after the Indian market.
V.R. Sharma, the deputy managing director and CEO of the group's steel business, said the company was "willing to put up plant of 2.5 to 3 million tonnes per year right away if the Thai government can spare us some gas that can be used as fuel to fire the plant".
The group, with a market capitalisation of more than $25 billion and a steel capacity of 7.8 million tonnes per year as of last year, plans to expand by more than double over the next few years.
"We will be an 18- to 20-million-tonne capacity company by 2013, and this means we are always on the lookout for expanding our operations," Mr Elmore said.
Thailand, he noted, is strategically located and would make a good hub for companies such as Jindal, whose wide array of business groups includes basic steel mills, power projects, alternative energy and education.
The company only last month announced a massive investment of $20 billion to expand its steel, power and other businesses over the next few years. Some of its biggest projects are in the northeast of India and involve coal, steel and hydroelectric power.
India has been inviting Thai investors to participate in the growth of the northeast for years, but lack of accessibility to the region has hindered them from even taking a look.
Apart from investing in Thailand, Jindal Group is eager to look at other Asean markets, particularly those rich in mineral resources such as Indonesia.
Jindal has a heavy presence in coal mining and already operates in Indonesia and Australia. The group also has operations in Mongolia, South Africa and Mozambique, and it is looking at the Russian market.
"We want to diversify," Mr Elmore said. "We would be more than willing to invest in Thailand now that the country has a stable government."
The group underlined its willingness to look at assets for sale, either by the owners or in a distressed-asset fire sale as in the past.
"We would always be interested at looking into any assets that are up for sale, and also into hydropower projects either in Thailand or in neighbouring countries," Mr Elmore said.
Jindal said that in the past the group looked at companies such as Nakornthai Strip Mill Plc (NTS) and Sahaviriya Steel Plc (SSI), but no deals materialised.
One of the key aspects of the group's green field project is to have access to sources of power and to be located near shoreline, so as to be able to build ports.
Being a large company, offers abound for Jindal to take over smaller companies. Some interesting steel mills are coming up for sale in Asean, especially in the Philippines. Other offers are likely to come from the West as it undergoes its economic crisis.
"We can go to the West, but we would rather go to the East, where the future is," Mr Sharma said. "The East is the future, and 60% of the global population is going to be in the East."
And it's not just steel and power plants that Jindal Group is looking to tap. Mr Elmore mentioned other areas such as the use of composite materials to construct housing for the poor at a cost of less than US$200 per square metre, something of certain interest to Thailand.
Apart from this, the company is a big supplier of "plastic road", which uses chemical and plastic waste to make the base of the road before cement or tar is applied, making it non-slippery.
