Ratan Jindal-led Jindal Stainless Ltd, part of the $16.5 billion OP Jindal Group, has signed a memorandum of understanding with South Korean steel major Posco for a long-term joint business opportunity.
The MoU is applicable for three years and can be extended by mutual agreement.
Under this agreement, the Indian steel company will supply 200 series stainless steel products to Posco and its subsidiaries and the two partners will jointly review the Orissa project of Jindal Stainless. The companies will also explore the establishment of a nickel smelter in Indonesia besides joint overseas projects such as service centres and cold rolling mills.
This is even as Posco’s own mega steel project in Orissa has been delayed for years. Posco is in the process of setting up a 12 MTPA greenfield steel plant near Jagatsinghpur district in Orissa, with an estimated investment of $12 billion. During the first phase of the project, the company is to build a 4 MTPA-capacity steel plant.
Even though the agreement is more for joint development of projects and does not immediately translate into Posco picking up stake in Jindal Stainless, the Indian firm saw its scrip shoot up 9 per cent and close at Rs 51.3 in a strong Mumbai market on Wednesday.
Jindal Stainless is led by Ratan Jindal, one of the sons of late OP Jindal. OP’s sons now lead separate companies which are, otherwise, part of the same group. While Naveen Jindal leads Jindal Steel & Power, Sajjan Jindal leads JSW Steel and Prithviraj Jindal controls Jindal Saw.
(Edited by Sanghamitra Mandal)
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