Jindal Stainless Ltd plans to invest ₹100 crore in Rathi Super Steel over the next two years as it looks to increase its offerings in the infrastructure space over the medium term.
Jindal Stainless had acquired debt-laden Rathi Super Steel for around ₹200 crore through the debt resolution process earlier this year.
“This is our first entry into long products, and the main reason for that is because of the country’s focus on infrastructure,” Abhyuday Jindal, managing director of Jindal Stainless Ltd, told .
It plans to increase Rathi Super Steel’s production capacity to around 200,000 tonnes per annum from 150,000 tonnes now.
Only about 2-5% of Jindal Stainless’ current portfolio of products can be used in the infrastructure segment. It plans to increase this to 15-20% over the next two to three years to emerge as a major player in this space.
The company has traditionally been heavy on flat stainless-steel products while the infrastructure segment uses long products such as wire rods, bars and re-bars.
The ₹100-crore investment into Rathi Super Steel will be used to increase capacity and improve the quality of the plant to make it more adaptable to products needed in the infrastructure segment.
The plant currently manufactures wire rods, which are low-value.
Jindal Stainless will look at producing bars and re-bars at the plant, which find application in railways, bridges and infrastructure projects, especially in coastal areas.
The central government is mulling making the usage of stainless steel mandatory in bridges near coastal areas as it looks to avoid the weakening of such bridges due to corrosion.
A policy like this could be a big demand driver for Jindal Stainless, a senior executive from the company said. “As more of lifestyle costing comes into the picture, infrastructure projects will see higher usage of stainless steel,” the executive said.