India’s top steel maker JSW Steel says it is scouting for more deals in the United States and Europe to expand its global footprint, betting that vibrant growth will underpin demand in overseas markets and complement a boom at home that has seen the mill ramp up local output.
“What is driving us is that, inherently, we find it is an interesting opportunity because the US economy is doing well” and the investment cycle looks positive, joint managing director Seshagiri Rao said. After meeting half its target for 10 million tonnes of capacity overseas, the steel maker is now looking to buy more facilities, Mr Rao said in Mumbai.
While the global industry has been roiled this year by tariffs imposed by US President Donald Trump on some flows of steel into the world’s top economy, mills are still enjoying benign conditions. Worldwide production hit a record in May as capacity utilisation climbed, according to the World Steel Association. Against that backdrop, Mumbai-based JSW has been busy: after announcing a move to triple output at its Texas plant, it snapped up another US facility in Ohio, taking total planned investment in the country to $1 billion (Dh3.67bn).
For Mr Rao, the commercial lure is not dependent on the trade moves, which he said are transitory. “The US economy – notwithstanding the trade remedial measures which the US government has taken – is quite buoyant, demand is picking up,” he said. “It is not because tariffs were introduced in the US or somewhere else, that is why we wanted to invest.”
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Still, Ritesh Shah, an analyst at Investec Capital Services, said JSW’s decisions were sound, in the context of the curbs. “It does make sense to have manufacturing bases in US and Europe in an increasingly protectionist world,” Mr Shah said. “One, it gives JSW Steel access to markets which would otherwise be difficult to get into. Secondly, it ensures you are closer to your customers.”
JSW Steel shares have soared more than 60 per cent in the past year, aided by record output and profit. To meet local demand, the company plans a $6bn capacity expansion in India. In May, it made an acquisition in Italy, and it has another purchase awaiting approval from India’s company law tribunal.
As part of its trade agenda, Trump imposed a tariff of 25 per cent on imported steel, aiming to restrict a flood of cheap foreign supplies. While that has helped to trigger some plant restarts, it’s alienated trading partners, and may spur tit-for-tat moves, with Canada now said to be is preparing its own measures.
JSW’s decision to plough more funds into Ohio caught the attention of US Commerce Secretary Wilbur Ross, one the key architects in the administration for its moves on steel, as well as potential curbs on a host of other items. In a tweet, Mr Ross lauded the “investments made in the great state of Ohio”.
US steel output has been picking up. Production in March topped 7.3 million tonnes, the highest monthly total since late 2014, according to World Steel Association data. The economy is about to enter the 10th year of expansion, and growth may reach 4 per cent this quarter, the fastest since 2014.
In Europe, ArcelorMittal is selling assets in Italy, Belgium, the Czech Republic, Luxembourg, Romania and Macedonia to meet regulatory requirements enabling the world’s top producer to take over Italy’s Ilva, for which a JSW-led consortium had also bid. Mr Rao denied reports that the company may make an offer for Arcelor’s Galati plant in Romania, while declining to comment on the others.
JSW Steel produced 15.8 million tonnes of crude steel in the year to March 31, up 26 per cent from a year ago. The company has said it plans to boost capacity by more than a third to about 25 million tonnes a year by March 2020.
“If someone is spending a billion dollars for a million ton, we spend only $500 million,” Mr Rao said. “On capital-allocation side, if we are cautious – whether I invest in US or Europe – then my returns always remain accretive not withstanding the cycles,” he said.
Pakistan squad
Sarfraz (c), Zaman, Imam, Masood, Azam, Malik, Asif, Sohail, Shadab, Nawaz, Ashraf, Hasan, Amir, Junaid, Shinwari and Afridi
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
UAE currency: the story behind the money in your pockets
Pari
Produced by: Clean Slate Films (Anushka Sharma, Karnesh Sharma) & KriArj Entertainment
Director: Prosit Roy
Starring: Anushka Sharma, Parambrata Chattopadhyay, Ritabhari Chakraborty, Rajat Kapoor, Mansi Multani
Three stars
England's all-time record goalscorers:
Wayne Rooney 53
Bobby Charlton 49
Gary Lineker 48
Jimmy Greaves 44
Michael Owen 40
Tom Finney 30
Nat Lofthouse 30
Alan Shearer 30
Viv Woodward 29
Frank Lampard 29
Fixtures
Sunday, December 8, Sharjah Cricket Stadium – UAE v USA
Monday, December 9, Sharjah Cricket Stadium – USA v Scotland
Wednesday, December 11, Sharjah Cricket Stadium – UAE v Scotland
Thursday, December 12, ICC Academy, Dubai – UAE v USA
Saturday, December 14, ICC Academy, Dubai – USA v Scotland
Sunday, December 15, ICC Academy, Dubai – UAE v Scotland
Note: All matches start at 10am, admission is free
Mohammed bin Zayed Majlis
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Profile of Tamatem
Date started: March 2013
Founder: Hussam Hammo
Based: Amman, Jordan
Employees: 55
Funding: $6m
Funders: Wamda Capital, Modern Electronics (part of Al Falaisah Group) and North Base Media
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
UAE currency: the story behind the money in your pockets
The biog:
From: Wimbledon, London, UK
Education: Medical doctor
Hobbies: Travelling, meeting new people and cultures
Favourite animals: All of them
More coverage from the Future Forum
LEAGUE CUP QUARTER-FINAL DRAW
Stoke City v Tottenham
Brentford v Newcastle United
Arsenal v Manchester City
Everton v Manchester United
All ties are to be played the week commencing December 21.
Walls
Louis Tomlinson
3 out of 5 stars
(Syco Music/Arista Records)
KILLING OF QASSEM SULEIMANI
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Crops that could be introduced to the UAE
1: Quinoa
2. Bathua
3. Amaranth
4. Pearl and finger millet
5. Sorghum
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
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Company%20profile
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RESULTS
Bantamweight:
Zia Mashwani (PAK) bt Chris Corton (PHI)
Super lightweight:
Flavio Serafin (BRA) bt Mohammad Al Khatib (JOR)
Super lightweight:
Dwight Brooks (USA) bt Alex Nacfur (BRA)
Bantamweight:
Tariq Ismail (CAN) bt Jalal Al Daaja (JOR)
Featherweight:
Abdullatip Magomedov (RUS) bt Sulaiman Al Modhyan (KUW)
Middleweight:
Mohammad Fakhreddine (LEB) bt Christofer Silva (BRA)
Middleweight:
Rustam Chsiev (RUS) bt Tarek Suleiman (SYR)
Welterweight:
Khamzat Chimaev (SWE) bt Mzwandile Hlongwa (RSA)
Lightweight:
Alex Martinez (CAN) bt Anas Siraj Mounir (MAR)
Welterweight:
Jarrah Al Selawi (JOR) bt Abdoul Abdouraguimov (FRA)
KILLING OF QASSEM SULEIMANI