India’s JSW Steel (JSTL.NS) is looking to acquire smaller steel plants in India and overseas that produce specialized products, a top executive said on Tuesday, as it tweaks its acquisition strategy after missing out on some recent deals.
JSW Steel, India’s biggest steelmaker in terms of domestic capacity, failed to outbid rival Tata Steel (TISC.NS) in March for bankrupt steelmaker Bhushan Steel. The company also lost out to UK-based steel manufacturer Liberty House for Bhushan Power following a bankruptcy resolution process for both companies in April.
Earlier this year, JSW was beaten out by ArcelorMittal SA (MT.AS), the world’s largest steelmaker, for Italian steel major Ilva SpA.
After the recent setbacks, JSW Steel is now looking to focus on buying more niche, lower capacity plants which do not require huge investments to turn around, said Seshagiri Rao, joint managing director and the group financial head of JSW Steel.
“In the next round, our strategic thinking is to now focus on special product units that generally have a capacity of about a million tonnes,” said Rao, referring to an upcoming round of auctions under India’s new bankruptcy law, during which a second wave of steel assets will be up for grabs.
India’s steel demand has been growing at over 8 percent for the last few months. The growth is being led by higher motorcycle and automobile sales and government-sponsored infrastructure projects.
Rao said that JSW Steel is scouting for opportunities in the specialized steel segment that are dedicated to meeting specific customer demands. He did not name the prospective targets.