Jindal Stainless is planning to relocate its Massillon plant from the US to China.

Jindal sources said, the company was currently weighing two options after the relocation: outright sale to a Chinese company or to enter into a joint venture agreement with the company. The decision was likely to be finalised within the next month.

Sources said, if the joint venture route was adopted, then the Chinese company would have the management control. But, the Jindals would also have a stake in the company.

Refusing to divulge the name of the company, sources said, the Chinese company was interested in striking a long-term sourcing pact with Jindal Stainless.

Massillon, it may be mentioned was acquired from Bethlehem Steel and commenced operations in 2000. Massillon Stainless Inc had a capacity for 50,000 tonne per annum stainless steel cold rolling facilities.

Sources pointed out that a major part of the raw materials for Massillon was being sourced from the Jindal plant in Hissar. Apart from Hissar, raw material requirements for the plant were met through supply of hot bands from stainless steel mills in the US.

Industry sources said, by relocating the plant, Jindals would be establishing a stronghold in China, which happened to be one of the most important export markets for the company.

Jindal Stainless, however, already has a presence in China.

China accounted for around 90 per cent of Jindal Stainless' exports. At the end of March 2003, the company's exports were around Rs 740 crore (Rs 7.40 billion) which was expected to increase to Rs 1,100 crore (Rs 11 billion) by the end of March 2004.

In the first quarter, this year, Jindal Stainless's exports stood at Rs 274 crore (Rs 2.74 billion) as compared to Rs 177 crore (Rs 1.77 billion), in the previous year. Out of this, China accounted for 80-85 per cent exports.

During 2002-03, Jindal's exports sales increased by around 57 per cent.

As part of the company's strategy to de-risk its export basked, Jindal Stainless was in the process of foraying into other markets like Europe, Indonesia and Malaysia. The company planned to push the Jindal Stainless brand in these markets.