From Bloomberg
India’s JSW plans investment of up to $500 million in Texas
Planned expansion to target U.S. oil and gas industry, Latam
India’s top steelmaker plans to triple output at its Texas plant as the U.S. and China trade punches in what may become an extended trade war, sparked by President Donald Trump’s tariffs on imports of the metal.
The U.S. unit of JSW Steel Ltd. has signed an agreement with the Governor of Texas to consider an investment of as much as $500 million, the Mumbai-based steelmaker said in a statement on Monday. JSW will invest about $150 million to raise capacity at its existing plate and pipe mill complex and spend the rest to set up a new hot metal facility, it said.
“We expect to triple the production, sales and revenue at the facility post the modernization,” Parth Jindal, director of JSW USA, said in Mumbai. The beefed-up unit will help service Mexico and parts of Latin America, besides the U.S., he said. Parth is the son of Sajjan Jindal, chairman of the parent company.
The only Indian steelmaker with a U.S. unit, JSW’s expansion comes after Trump slapped a 25 percent tariff on imported steel, aiming to restrict a flood of cheap foreign supplies that have hurt American mills. President Xi Jinping retaliated as China, the largest producer, announced counter-tariffs on $3 billion of U.S. imports from pork to steel, escalating a trade war that has roiled global markets. For JSW, the charms of the U.S. market have been accentuated by a rebound in crude oil.
“This is the right time to invest in the U.S. economy, and specially in manufacturing of steel,” said Jindal. “Not only will there be a huge replacement of old pipeline infrastructure that was built predominantly in the 1960s and 70s, there are going to be a lot of new pipelines being added.”
The Texas unit of the Indian conglomerate, bought in 2008 just before the financial crisis crippled the U.S economy, currently produces 300,000 metric tons a year and is expected to churn out as much as 1 million tons after the modernization and expansion is completed in 24 months, he said. The entire plate market in Texas is about 8 million tons, Jindal said.
JSW’s shares rallied as much as 3.2 percent and were trading at 294.20 rupees at 3:20 p.m in Mumbai.
“We are keen to make a very big impact in the steel industry,” said Jindal. “We want to bring steel manufacturing back to the U.S.”
