Decreased demand for steel in the United States and European markets has made the Pennsylvania, US-based Harsco Corporation (NYSE:HSC) now look to India and China for propping up its sagging bottom line.
Harsco Corporation, a global industrial services company with revenues of upwards of US $3 billion, has been scouting around for more business by way of forging alliances and acquisitions in both these countries.
Just last month, the company had announced a new multi-year contract valued at more than $100 million with India’s largest stainless steel producer, Jindal Stainless Limited (JSL).
A report in the Mint stated that besides the JSL deal, Harsco had won another contract worth $225 million from JSW Steel Ltd for metal recovery and scrap management at its steel plants. The company had also bagged other contracts worth $350 million from Chinese clients for railway track maintenance.
Among the Indian producers, Jindal Stainless, with a capacity of 1.8 million tons per year (MTPA), accounts for about 50 percent of the total domestic production. Other major players include Salem Plant of SAIL, Viraj Steel and Mukand Ltd.
A JSL representative later told reporters that the contract would help Jindal Stainless Limited to improve efficiency in the metal recovery process through an industry leader like Harsco, without making any additional capital investment.
Harsco’s eye clearly is on India’s stainless steel production, which is in surplus capacity at about 3.5 MTPA. Of this, about 0.8 MTPA gets exported. The company is no stranger to India, though, giving it an edge over rivals, since it has been in India for over two decades.
Harsco is said to be big in metals and minerals, infrastructure, rail and industrial businesses. Its India operations have so far not been a big part to its overall revenues, but Harsco President and CEO Patrick Decker is hopeful of changing that.
To be continued in Part Two.
Sohrab Darabshaw contributes an Indian perspective to MetalMiner.