Jindal Steel Expands into Europe with Strategic Acquisition of Vítkovice Steel
According to reports in local media, Jindal Steel International, a prominent Indian steel company, has secured 100% ownership of Vítkovice Steel, a key player in the Czech Republic's steel industry. The acquisition was approved by the Office for the Protection of Competition of the Czech Republic on December 20, 2024, with the change of ownership officially taking effect on January 1, 2025. This marks Jindal's first European acquisition, further expanding its global reach in the steel industry.
Vítkovice Steel, located in Ostrava, is the only plate steel manufacturer in the Czech Republic, with a production capacity of 800,000 metric tons per year. Historically, the company has been a re-roller since 2015, sourcing slabs from external suppliers primarily from Russia, Asia, and the European Union. Now under Jindal's ownership, the company is set to undergo significant transformations aimed at ensuring long-term sustainability and growth.
Transformative Investments in Technology and Eco-Friendly Practices
Radek Struhal, CEO of Vítkovice Steel, expressed confidence that the acquisition would bring much-needed stabilization and development to the plant. He highlighted Jindal's plans to invest in state-of-the-art production technologies, facilitate a knowledge exchange, and implement environmentally friendly, low-emission steel production techniques.
Jindal's investment strategy includes an estimated €150 million to enhance Vítkovice's production capacity and increase the production of high-value-added products. These efforts align with Jindal’s broader vision of modernizing operations while reducing environmental impact in line with global sustainability trends.
Shifting Supply Chains: Vítkovice’s Dependence on External Slab Suppliers
Currently, Vítkovice Steel depends heavily on imported semi-finished products, particularly slabs from Russia. However, the company plans to shift its sourcing strategy post-acquisition. A Vitkovice representative revealed that in the future, more slabs would be sourced from Jindal itself, although the company will continue to rely on other suppliers for the time being.
Despite this change, the Jindal Group has no immediate plans to install an electric arc furnace or restart domestic slab production at the Ostrava facility. Instead, Jindal is focusing on optimizing the plant's existing capabilities while gradually introducing innovations that would improve efficiency and environmental outcomes.
A Complex History and Transition of Ownership
Before the acquisition, Vítkovice Steel had a tumultuous ownership history. Originally owned by the Russian company Evraz Plc, the plant was sold in 2014 to a group of private investment firms based in Cyprus for $89 million. Following the sale, questions regarding the plant's ownership arose, particularly concerning possible links to Russia, which were denied by the company.
In May 2022, the Czech Financial Analytical Authority froze Vítkovice Steel’s assets, suspecting that Russian entities were behind the Cyprus-based investment funds. However, the allegations were never confirmed, and the Czech authorities closed the investigation in July 2024, clearing the way for the negotiations with Jindal Steel to continue.
