Naveen Jindal controlled Jindal Steel and Power Ltd (JSPL) will acquire Oman-based Shadeed Iron and Steel Co for US$464 million, marking its first overseas presence in the steel sector.
The company concluded the buyout agreement with UAE's Al Ghaith Holdings, which owns the Shadeed Iron and Steel Co.
"Jindal Steel and Power (JSPL) through its 100 percent subsidiary, Jindal Steel and Power (Mauritius), has decided to acquire Shadeed Iron and Steel Co (Shadeed), a company incorporated under the laws of the Sultanate of Oman," the leading domestic steel maker said in a statement.
"A definitive Share Purchase Agreement (SPA) and other transaction documents have been signed at US$464 million including the assumption of liabilities," it added. The company said it has tied up US$400 million in debt financing from international banks and the balance will come from internal accruals.
In an earlier report, JSPL's attempt to acquire the Zimbabwe Iron and Steel Company (Ziscosteel) has failed. The Zimbabwe government has decided not to sell the ailing company to large corporations such as JSPL and ArcelorMittal. The technical team which analysed the bids of interested players has recommended not to accept these proposals as the interests of the bidders 'could overwhelm Ziscosteel and work against the wishes and interests of the country'.
The government would now relook the whole exercise and come up with a medium-scale partner within a short period to revive Ziscosteel. The company, the largest steelworks in Zimbabwe, has debt of around US$300 million (Rs. 1,390 crore) and its plant had stopped operations in 2008 following the global slowdown. Apart from the steelworks, Ziscosteel also owns an iron ore mine in Zimbabwe.

JSW Steel, the country's largest private sector steel maker by domestic capacity, reported steel output in April at 5.06 lakh tons, a rise of 20 per cent from the comparable month last year. The company attributed rising demand for its products as the major driver for higher steel production. The Sajjan Jindal-led firm had recorded an output of 4.22 lakh tons in the year-ago period. Moreover, the company said its production of flat steel products consumed primarily by automobile and consumer durable industry in April rose by 28 percent to 3.47 lakh tons over the same period last year. The firm had produced 2.70 lakh tons of flat steel products in April 2009. Also, JSW Steel saw output of its long steel products used by infrastructure and construction companies rising by about 86 percent to 1.05 lakh tons in April 2010 over the same month a year ago when it had produced 56,000 tons of such products. Last month, the company started commercial production from its 3.5 million ton per annum (MTPA) hot strips mill at Vijayanagar works in Karnataka. The new hot strip mill produced about 36,000 tons in the first month of commissioning itself and ramping up of capacity is happening at faster pace.

Concerned with worsening economic crisis in Europe, Essar Steel Holdings has cancelled its plan to raise about US$750 million (Rs 3,360 crore) through dollar-denominated bonds, reports said. The company plans to revive the issue after at least two quarters, according to a banker familiar with the development. The company had earlier said it planned to issue senior notes due in 2017 to refinance debt and raise fund for potential acquisitions. It had hired Bank of America Corp, Deutsche Bank AG, Standard Chartered and UBS to help it raise the money. Last month, Moody's Investors Service gave a provisional B2 rating to Essar Steel's proposed bonds, its fifth-highest speculative-grade ranking. It graded the company one notch higher at B1. According to a data, the Essar Group, the parent company of Essar Steel, has equivalent of US$1.9 billion in bonds outstanding. Of this, US$1 billion is due to mature next year. Essar Steel is at least the fourth Indian company to postpone a planned bond sale since February. Union Bank of India dropped a dollar bond sale on April 14, after Bank of India and Bank of Baroda cancelled similar issues in February citing volatility in credit markets. Bank of Baroda and Bank of India returned to the debt market a month later, selling US$350 million of 5 1/2-year bonds and US$500 million of similar-maturity notes respectively.

VISA Steel, a part of Rs. 5,000 crore VISA Group, is setting up an integrated Special Steel Plant at Kalinganagar Industrial Complex in Orissa. The VISA Group has business interests in steel, power, international trading, shipping and logistics.
The company is currently a producer of pig iron, LAM coke, ferro chrome, sponge iron and power. The company registered a robust financial performance in FY'2009-10 with a revenue growth of 12.59 percent to Rs. 1,171.48 crore, an increase in EBIDTA by 635.15 percent to Rs. 197.63 crore, increase in PBT by 185.79 percent to Rs. 85.68 crore and increase in PAT by 170.98 percent to Rs. 47.42 crore compared to a loss of Rs. 66.81 crore during FY'2008-09. The company has recommended a dividend of 10 percent on the equity shares of Rs. 10 each.
For the Q4 of FY'2009-10, VISA Steel has registered excellent growth in financial performance with a revenue growth of 40.25 percent to Rs. 407.28 crore, increase in EBITDA to Rs. 69.07 crore and increase in PAT to Rs. 16.51 crore compared to a loss of 110.68 crore during Q4 of FY'2008-09.
VISA Steel is setting up a 0.5 million TPA Special Steel melt shop, 0.5 million TPA Special Steel bar and wire rod mill and additional 25 MW power plant to complete the integrated facility of special steel making in Orissa, with captive power generation.
VISA is planning to integrate backwards into mining of iron ore, chrome ore and coal. Iron ore is currently being sourced from OMC until commencement of its own mining operations. A part of the Patrapada Coal Block at Talcher with 54 million ton deposit has been allotted to the company. The company is also developing a chrome ore deposit through its subsidiary company, Ghotaringa Minerals Limited. The requirement of coking coal is being imported from Australia.
VISA Steel has a joint venture company called VISA BAO Limited wherein VISA Steel holds 65 percent and Baosteel Resources, China holds 35 percent. VISA BAO is setting up four furnaces of 16.5 MVA each for production of 100,000 TPA Ferro Chrome at Kalinganagar in Orissa. VISA BAO is currently in the process of completing the financial closure for the project. The entire equity from promoters to the extent of Rs. 91 crore has already been infused into the company.
Commenting on the performance for FY'2009-10, Vishal Agarwal, Managing Director of VISA Steel said: “Our operational and financial performance during FY'2009-10 continued to maintain a healthy uptrend over the quarters. The increase in production volumes across all units has enabled VISA Steel to register a robust growth in sales revenue inspite of lower sales realisation of the various products. The lower cost of raw material such as coking coal, iron ore and chrome ore and better operating efficiencies have resulted in better operating margins.
“We continue to drive our low cost competitiveness largely due to strategic location, efficient raw materials procurement and captive power generation. With forward integration of steel melt shop and bar and wire rod mill and additional power generation, revenues and profitability are expected to improve further.”

Tata Steel plans to switch to quarterly contracts for raw material suppliers from the existing annual benchmark pricing system. Tata Steel managing director HM Nerurkar recently said that the world would have to move to quarterly contracts. He was echoing what Lakshmi Mittal told shareholders at the ArcelorMittal annual general meeting. “The company was mulling a switch in business model to quarterly contracts,” Mittal had told the gathering. Of the total production of seven million tons (MT) at Tata Steel's Jamshedpur unit, 30-35 percent cater to the retail segment, where most of them are either on monthly contracts or of even less duration. Nerurkar said although automotive supplies were on half-yearly contracts, it would soon switch to a quarterly system. Automotive accounts for about 17 percent of the company's long-term supply pacts. The company has also told the railways that it would switch to quarterly contracts. The decision to switch to quarterly contracts was a result of a dramatic change in pricing policies by raw material suppliers to cash in on the resurgent demand. The supplies were controlled by three or four players. Of the US$200-billion iron ore industry, BHP Billiton, Rio Tinto and Brazil's Vale control about two-thirds. Coking coal is controlled by BHP, Rio, Anglo, Anglo American and Xstrata. Tata Steel's India operations has 100 percent iron ore and 50 percent coking coal security, while Corus, which accounts for around 65 percent of the group's production capacity, has no captive mines. Some ore and coal would start flowing in for Tata Steel from Canada and from mines in Mozambique from next year. The concern over raw material security stems from the surge in prices. Iron ore prices have increased 30 percent since December 2009 to US$143 a ton, while coking coal has increased 16 percent to US$220 a ton.

Elecon Engineering Company announced that it has bagged orders worth Rs 208.50 crore from various vendors, including GMR Infrastructure and Steel Authority of India Limited for construction related works.
The company has bagged an order worth Rs 94.80 crore from GMR Infrastructure for construction related work on the coal handling plant under the EMCO Energy Thermal Power Project in Maharashtra.
In addition, Rs 39.27 crore order was received from Zuberi Engineering Company, besides another Rs 30.39 crore project from Adhunik Power and Natural Resources, for supply of raw material to their coal handling plants in Maharashtra and Jharkhand, respectively.
The company has also bagged a project worth Rs 8.99 crore from SAIL for supply of raw material to the ore handling plant under the Bhilai Steel Plant. A similar Rs 35.05 crore order for supply of raw material was awarded by BGR Energy to Elecon for a coal handling plant in Chhattisgarh.

Rourkela Steel Plant (RSP), a unit of Steel Authority of India Limited (SAIL), has started 2010-11 on a high note by posting best ever production figures of sinter, hot metal, crude steel and saleable steel for any month of April since its inception, reports said. The steel plant clocked a sinter production of 2.9 lakh tons in April 2010, thereby recording a growth of nearly six percent over April 2009. Similarly, its hot metal output at 1.92 lakh tons in April was higher by seven percent over the same month of the previous year. RSP's crude steel and saleable steel production for April stood at 1.78 lakh tons and 1.59 lakh tons respectively. This represented a growth of six percent in crude steel and more than eight percent in case of saleable steel compared to April last year. The steel plant was able to register high production growth by maximising capacity utilisation with a view to controlling costs and thereby improving its profitability. RSP continued to operate its major facilities much above the rated capacity, achieving capacity utilisation of 115 percent in sinter production, 117 percent in hot metal, more than 114 percent in crude steel and nearly 116 percent in saleable steel production. The growth in saleable steel production was backed by impressive growth in production of plates from plate mills (18 percent), hot rolled coils for sale (14 percent), hot rolled plates (5 percent), galvanised sheets (29 percent), CRNO (cold rolled non-oriented) steel from silicon steel mill (16 percent).

The government said that steel giant Posco has been permitted to export iron ore to South Korea from the captive reserves it will be allocated to feed its proposed Rs 51,000 crore project in Orissa. The company has been allowed to ship iron ore from Orissa as per conditions of MoU. The Mines and Mineral Development and Regulation Act, 1957, governs allocation of captive resources like iron ore. Such minerals are alloted only for dedicated consumption by the end-use project. Sale and export of minerals from such deposits are normally not allowed. As per details of the agreement signed between the Orissa government and the firm in 2005, Posco will need about 600 million tons (MT) of iron ore to run its proposed 12 MTPA plant for the next 30 years. Iron ore is a vital raw material for making steel. The company may swap certain quantities (not exceeding 30 percent of the total requirement of the Paradeep plant annually) of such iron ore which have high alumina content with equal quantity of low alumina content iron ore. Any export of iron ore by way of swap will be allowed only after an equivalent quantity of ore has been imported for the plant. Meanwhile, export of additional 400 MT of iron ore from India for existing steel plants of Posco in South Korea would be regulated by the prevailing Export-Import (EXIM) policy. The quantity of iron ore to be exported and imported will be within the framework of EXIM policy while no minable reserves will have a provision for the purpose of purely direct exports. As per the MoU with the state, Posco was to commission the first phase of its project comprising 6 MTPA capacity by July 2010, and the whole project was to get off the ground by July 2016. However, Posco has been facing delays in the launch of the proposed plant for about five years now on account of problems in acquiring land and regulatory clearances. Its application to mine iron ore in Orissa is stuck in litigation. In the wake of such delays, the company is exploring the option to set up a Rs 30,000 crore plant in Karnataka. It is also in talks with SAIL to build two multi-billion dollar plants in India in a joint venture.

Jindal Steel and Power reported its consolidated net profit rose by 7.73 percent to Rs 963 crore in the fourth quarter ended March 31, 2010. Total income rose to Rs 3,205 crore for the quarter ended March 31, from Rs 2,876.50 crore in the same period last year. The board has proposed a dividend of 125 percent, which is Rs 1.25 per equity share of the face value of Re 1 each. For the year ended March 31, 2010, the company reported a consolidated net profit of Rs 3,634.5 crore, up 20.86 percent over the same year-ago period.

SMS Meer India conducted a symposium at Hotel Hyatt Regency, Kolkata on April 28 and 29, 2010 where representatives from various SMS Meer product units from Germany, US, Italy and UK were present. Nearly 82 participants from 31 different Indian companies attended the event. The presentations made by speakers from India, Germany, US, Italy and UK covered topics like Indian Steel Industry. The event was supported by SMS Meer India. Latest developments and new concept of Wire Rod Mills, Meerdrive - the revolutionary drive concept for Wire Rod Mills, Process Technology for Wire Rod Mills Coil Handling, Micro Mill-rebars for local demand, Medium and Heavy Section Mills, Product Portfolio of SMS Elotherm, and SMS Schumag-Bright Bar handling were discussed.
The participants appreciated the idea and the content of this symposium. The
event also presented an opportunity to the long product steel producers to
meet on one platform and discuss with SMS Meer experts on various business
developments covering new technologies, new projects, issues related to existing operations, spares sales and services regarding long
product rolling mills.

Usha Martin reported Q4 of FY10 consolidated net revenues of Rs 6.5 billion. Consolidated EBITDA at Rs 1.4 billion was below the estimates of Rs 1.7 billion largely due to higher raw material costs as company increased its bought out metallic usage for billet production during the quarter since the blast furnace was shut down in January and partly in February and lower proportion of wire ropes sales. Thus, while billet production increased 20.8 percent Q-o-Q, hot metal production reduced 22.5 percent Q-o-Q leading to
disproportionate increase in bought out metallic. Since then, blast furnace is now operating at normal rates thereby restoring effective raw material cost to normal levels.
The company's consolidated PAT was Rs 693 million, was supported by lower tax rate of 4.6 percent. The company's net realisations of wire rods increased from Rs 35,900 per tons in Q3 of FY10 to Rs 36,900 per ton in Q4 FY10. Blended realisations for value added products declined slightly from Rs 61,800 per ton in Q3 of FY10 to Rs 61,000 per ton in Q4 of FY10. Realisations of value added products tend to pick up with a lag as compared to plain vanilla products. Prices of both steel and value added products have increased in the current quarter over those in Q4 of FY10.

The public sector mining major National Mineral Development Corporation (NMDC) will start the construction work for its 3 million tons per annum (MTPA) integrated steel plant in Bastar district of Chhattisgarh in October this year. The company has started the process of tendering and the work on the project will start in October this year. The integrated steel plant of the country's biggest iron ore producer and exporter will come up near Nagarnaar, about 20 km from the divisional headquarters of Bastar. The company plans to invest about Rs 12,000 crore on the project. The then Union Minister for Chemicals and Fertilisers and Steel, Ram Vilas Paswan and Chief Minister of Chhattisgarh Raman Singh laid the foundation stone for the proposed steel plant in September 2008. The state government had acquired 403 hectares of land for the company in early 1990's. The NMDC had earlier said that construction work would be completed within 36 months and commercial production was expected to start by August 2011. The company would be using the most modern technology to set up the plant. The iron ore would be supplied from the company's mechanised mines in Bacheli-Kirandul of Dantewada district. The company would be setting up a second rail line of about 100 km between Jagdalpur and Bacheli to facilitate shipment of raw material. The steel plant is expected to create about 12,000 indirect and direct employment in the tribal-dominated pocket of the state.