Sajjan Jindal (File Photo| Bloomberg Quint)
JSW Group chairman Sajjan Jindal has been vocal about cutting trade links with China. For example, refractories for his company’s blast furnaces will come from Turkey and Brazil, he said in an interview with Bhavya Dilipkumar & Satish John. Jindal also said he’s committed to acquiring Bhushan Power & Steel Ltd but reiterated that the group cannot take on the liabilities of a “tainted and expensive asset”. Edited excerpts:
As border tensions flared, your recent tweets mentioned the need to stop trade with those that are not India’s friends. How viable is this option?
Of course, it is not an easy route. The auto industry is dependent on (China for) 40% of components. The steel industry’s 100% refractories come from China. One approach is to say that war will be fought by our soldiers, and my job is to make steel at a cheaper price by buying from China. But another view is — look at the $100 billion opportunities that Indian companies should tap. There will be some pain in the short run. But see, I respect my country and my army. If they (China) have killed 20 of my soldiers, I’m not going to buy products from them and strengthen their armies more.
What measures has the company taken to lower imports from China?
Directly and indirectly at JSW, there might be over a billion dollars of imports that come from China. And to curb that, we have recently put a clause in all our purchase orders that specify no materials should come from China. Our focus is, no material should be imported from a country that is not friendly to India, specifically China and Pakistan. At JSW, we used to import around 100% of refractories from China and now we have already worked out an alternative supply. We have placed orders from Brazil and Turkey and some from India. Within three-six months, the cost too will neutralise. The new supplies will be coming in by October.
One reason for dependence on China is cost. Will higher costs be transferred to consumers?
When we import equipment (that’s) not from China, it will obviously cost around 10-15% more. We negotiate and even sacrifice some cost for the short term, and once the other countries increase their capacities, the cost will come down. It is a narrow-minded approach to think there is no other alternative.