JSWMI Steel Service Centre, a joint venture between JSW Steel and Japan’s Marubeni-Itochu Steel, plans to set up its third service centre near Chennai to tap the growing demand from auto companies.
It was earlier servicing the auto companies near Chennai from its main plant at Vijayanagar in Karnataka.
Jayant Acharya, Director, JSW Steel, said the company has received approval to supply steel to automobile companies, and there is now a need to get closer to auto making units for efficient servicing.
“We are looking for a suitable location and the investment will be announced soon,” he told
Currently, JSWMI has two service centres — in Pune and Palwal (Haryana).
Acharya said JSW Steel expects 0.2 million tonnes of additional tin plate capacity at Tarapur to go on stream this quarter. It will cater to the rise in demand with a ban on using plastic as packaging material being enforced across the country.
Steel demand from white goods companies such as Samsung, Whirpool, Kelvinator, LG and Heir has grown 75 per cent, he added.
Rising costs
While the demand has remained strong, Acharya said rising imports and a spike in input costs have been a concern.
Despite the sharp rupee depreciation, steel imports have not moderated as most of the shipments were booked two-three months in advance. Fresh order bookings are expected to come down in a few months. Between April and August, India imported 3.8 mt and exported 3.47 mt, thus becoming a net importer — against being a net exporter for the last three years — Acharya said.
On the other hand, almost all the raw material prices in the domestic market, including iron ore, coal, refractories, ferro alloys and graphite electrodes, have increased. This apart, the transportation cost has gone up due to a rise in diesel price, he added.
Despite a rise in operational cost, steel companies had to reduce prices in July and August while a marginal price hike was done in September. Steel companies are trying to pass on the incremental cost when the new supply contracts for the December quarter are signed this month, said Acharya.