JSPL Says ‘Business Is As Usual’ Despite Coronavirus Lockdown. Here’s What Helped
The situation throughout the year was stable and the fourth quarter is expected to be “pretty good” as well, says VR Sharma.
WATCH | MD VR Sharma On Covid-19’s Impact On JSPL
While the new coronavirus pandemic stalled economic activity, it was “business is as usual” for Jindal Steel and Power Ltd.
“There’s no slowdown or adverse impact on production or sales,” VR Sharma, managing director at the steelmaker, told BloombergQuint. “Global demand is good, and as China is facing a shortage of 20 million tonnes of steel, India is the nearest country that can supply to China and other Southeast Asian nations,” he said. “This is a good opportunity for us.”
The Covid-19 outbreak has stalled economic activity and International Monetary Fund has already declared a recession. In India, it disrupted an economy that’s set to grow at its slowest pace in a decade. The Narendra Modi-led government, which locked down the nation for 21 days to combat spreading of the virus, announced a Rs 1.7-lakh-crore stimulus. The Reserve Bank of India, too, announced several measures to deal with the crisis.
Booking of orders before the lockdown, according to Sharma, is what has kept JSPL in good stead. The situation throughout the year was stable, he said, adding the fourth quarter is expected to be “pretty good” as well.
However, one problem that Sharma highlighted was of receiving payments as the banking system is not geared up. Also, supply of materials to customers was a small issue as trucks aren’t allowed to ply due to the lockdown, he said. “But we have requested the government for some relaxation.”
“Ports are open and they are doing very well. That’s why we have not reduced production or sales,” Sharma said, adding availability of raw material is also not an issue as Indian Railways supported the company well by giving racks for everything that is needed. “We are trying to encash this situation by supplying for exports so that we can earn maximum foreign exchange for the nation and that is what our aim is.”
Production Target
About meeting its steel production target of 6.5 million tonnes in India and 1.8 million tonnes in Oman, Sharma said the company is very close to achieving that, “not exactly the number but very near ”.
“We are apportioned to produce 8 million tonnes in India and another 2 million tonnes in Oman for FY21 and everything is going very smooth,” he said.
Highlights Of The Interview
- Looking to sell some iron ore mines and coal mines to reduce debt.
- Promoters are looking to bring down the debt against shares but nothing on the anvil immediately.
- There was no invocation of any of the pledged shares by investors.