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The 60-year-old Ravi Uppal joined billionaire politician Naveen Jindal-promoted Jindal Steel & Power as Managing Director and Chief Executive Officer in October last year. Coming from his last assignment at engineering and construction giant Larsen & Toubro, Uppal has strategised rejig and targets to introduce new businesses at the Rs 38,575-crore worth group focussing primarily on steel and power sectors. The IIT and IIM alumni, who also worked with ABB and Volvo earlier, in his first media interview, post joining JSPL, with Business Line talks about the way ahead. Excerpts:
What are the new dynamics expected in the Group after you took charge?
We are in the process of restructuring the entire business. We would announce it in April. We will have more focussed businesses and introduce new verticals. We would go aggressively on external strategy to acquire more mines and set up power plants overseas. Already, we are in process of setting up power plants in Senegal, Mozambique and Bostwana.
JSPL is on a shopping spree in domestic and overseas market. What is the strategy behind so many acquisitions?
We are not in a rat race. We are making sure that there is full access to raw materials in the long-term. We have acquired mines in South Africa, Australia, Mozambique and Bostwana. We did it because we want our raw material supply to remain secure. Second, we are targeting price stability of raw materials. Also, in terms of energy consumption, efficiency and production we want to be best in class.
Other Indian companies also acquired mines to source fuel. But the calculations went wrong. How are you different?
One, we are not in a fixed price market. Second, we have operations in both the markets — domestic and overseas. We are trying to source fuel domestically for units here. Only in mines where there is thermal coal in addition to coking coal, we may bring some of that to India. By acquiring our own mines outside, we do not have the cost of sourcing. The only volatility we have is exchange rate. Also, we are not acquiring mines overseas through joint venture model. Thus, we are not protected from being arm-twisted by the partners because of any external incidences like international prices going northwards. We prefer acquiring assets on our own.
This means you want to set up power stations based on imported coal?
If you import thermal coal, there is lot of opportunities to set up coastal power generating stations, as cooling water can be sourced from sea and a de-salination plant can be set up. Coal can be brought through conveyer from port to the unit, which may be 5-6 km away. Moreover, the southern States are power hungry.
Does that mean JSPL is no more interested to coal blocks here (India)?
We are looking at both options. If we can get mines, we can set up pit head stations in Central or Eastern India. Else, we will go for coastal units. We would not like to transport coal with 50 per cent of ash content. We need to generate power at affordable rates.
For the blocks to be auctioned, we would look at location, reserves and whether it is opencast or underground. We would try to ascertain the risk and bid a price that is economically viable for us.
What attracts you towards Gujarat NRE Coke Ltd?
Gujarat NRE has some of the best mines that are producing hard coking coal. The mines are situated 120 km south of Sydney and just eigh km from the port. Logistics are simple. The regulatory regimes are stable. Australian mines are very good prospects. It is a part of our strategy to acquire raw materials.
Today, JSPL is the 6{+t}{+h} largest steel maker in India. What capacity expansion is on the drawing board?
At present, the steel production is 3.5 million tonnes (mt). In 2013-14, additional 7 mt would be commissioned in Angul (Odisha) and Oman. By 2020, we would have 15 mt that might make us fourth largest.
What is the debt scenario of the group?
The total debt to equity ratio is about 0.85. We are conservative on debt. It is in the range of approximately Rs 14,000-15,000 crore. So far, we have not raised any funds from overseas market. Rupee debt is better for us because there are uncertainty in exchange rates, while borrowing in foreign currencies.
Are you planning IPO for Jindal Power Ltd?
We have not felt the need. As of now, it is an option which we are not exercising.
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