Jindal Stainless Ltd (JSL) has picked up a 49% stake in Indonesian metals company, New Yaking Pte. Ltd, for about $157 million ( ₹1,233 crore), it said in a statement on Tuesday.
The joint venture will allow JSL to investment, develop, construct and operate a nickel pig iron (NPI) smelter facility located in an industrial park in Halmahera Islands, Indonesia.
The strategic collaboration offers benefits of backward integration as JSL would have a stake in the business of NPI. The unit is likely to be commissioned within two years, with an annual nameplate production capacity of 200,000 metric tonnes, with an average 14% Ni Content, JSL added.
This is the first-ever strategic partnership by an Indian company for securing a stake in nickel reserves, globally, as India is deficient in nickel ore.
“This path breaking collaboration will enhance value for stakeholders with JSL acquiring a stake in nickel supply to create raw material security for its stainless steel operation. This acquisition will usher a sharp competitive advantage to JSL in the Indian and international markets,” Abhyuday Jindal, managing director, Jindal Stainless, said.
Nickel price has been a key factor in stainless steel business across the globe. Furthermore, geopolitical uncertainties, logistical issues, and covid-induced constraints, often affect demand supply dynamics of nickel, thereby increasing the cost for user industries such as stainless steel.
Currently, JSL meets a bulk of its nickel requirement via stainless steel scrap, and NPI- ferro nickel. This collaboration will secure an ample supply of NPI for JSL.
Founded in 1970, Jindal Stainless (comprising JSL and Jindal Stainless (Hisar) Ltd) posted a turnover of $4.20 billion in FY22. The firm’s annual melting capacity is set to reach 2.9 million tonnes by the end of FY23.
It owns two manufacturing complexes in India, in Haryana and Odisha, as well as an overseas unit in Indonesia.
Besides, it has six service centres in India and one in Spain. It also has a world-wide network of 14 offices and 10 sales offices in India.
Its products ranges from stainless steel slabs, blooms, coils, precision strips, plates, blade steel, coin blanks and sheets.
