JSW to sharply reduce exports focus by fiscal-end

The USD 14-billion JSW Group, owned by Sajjan Jindal, has taken a decision to bring down its export volumes to 15-20% of its total production by the end of the current financial year of 2020-21.

The company, at present, is exporting over 55% of its products.

"The company is exporting at 55%+ but will bring this down to 15-20% towards the end of the year, say, from January-February," informed a source.

Exports of finished flats, finished longs and semis, overall, in India had seen a sharp increase following the COVID-19-induced lockdown in India from March 24 onwards. Since domestic demand had dried up, steel makers had to resort to exports to keep the revenues coming in till domestic demand resumed. In fact, from April to June, there had been an exponential jump in export volumes and around 60-65% of this quantum had been going into China.

Production & despatches

JSW Steel's flagship Vijayanagar plant, has set itself a production plan of 9.50 lakh tonnes in August 2020, which is a slight increase of 3.26% over the 9.20 lakh tonnes it had set for itself in July, 2020, as per industry sources. In this 9.50 lakh tonnes, the volumes share of exports has been kept lower, at 2.70 lakh tonnes, it is learnt.

Asked about the lower exports target for August, the source said, "There are plan to gradually reduce the export volume as domestic demand is increasing."

It is to be noted that the conglomerate had set a higher target of 4.25 lakh tonnes in the July production corpus of 9.20 lakh tonnes. Actual exports for the said month, however, fell short, at 3.9 lakh tonnes, but which was almost 92% of the target. As already mentioned, for August, 2020, the exports target is lower at 2.70 lakh tonnes.

However, in the 9.20 lakh tonnes produced in July, 2020, the steel major was able to meet its targeted 4.95 lakh tonnes of despatches for the domestic market.

Altogether, the company was able to despatch a total volume of 8.85 lakh tonnes, against the targeted 9.20 lakh tonnes, which means a 96% realisation of the goal.

Production target rollover

JSW Steel has kind of rolled over last year's total production figure for the steel business to the current fiscal, at 16 million tonnes (mn t) against the pandemic backdrop.

The company, for the first time in more than six years, posted a loss as production was reduced sharply for the better part of the April-June quarter (Q1) of 2020-21. It reported a net loss of Rs 561 crore for the quarter under review.

Labour returning

Meanwhile, it is learnt that the company is recalling its labour hands or is arranging for workers' arrival from various states. Labour hands are joining as well while their stay is being arranged within the township, now that normalcy is returning post the COVID-19 outbreak in the plant.

~By Madhumita Mookerji