In its concerted effort to improve efficiency in metal recovery, Harsco Corporation (HSC) recently entered into a new multi-year contract spanning 15 years with Jindal Stainless Limited -- the largest steel producer in India.
Jindal Stainless Limited is a producer of stainless steel products that includes Ferro Alloys, Stainless Steel Slabs & Blooms, Hot Rolled Coils, Plates, Cold Rolled Coils and specialty. In Jan 2012, Harsco also secured a similar multi-year contract worth $225 million from JSW Steel to provide onsite services to India's largest private sector steel producer.
The contract worth $100 million is a win-win situation for both the companies. With this contract, Harsco will partner Jindal Stainless for material handling to serve the rapidly developing steel sector in India, thereby augmenting its revenue. Harsco is expected to render its services in the second half of this year and would primarily help in recovering metal from stainless steel production by-products.
The deal would strengthen the long-standing mutual business relationship between the companies. In addition, Harsco will benefit from expansion into emerging markets like India and establishing itself as a premier industrial company offering dedicated services to infrastructure-oriented sectors like steel.
On the other hand, without making any additional investments, Jindal Stainless will reap the benefits from an industry leader like Harsco to improve its metal recovery processes, and thereby improve its profitability.
Headquartered in Penn, Harsco is a diversified, multinational provider of market-leading industrial services and engineered products. The company serves global infrastructure, metals, minerals, rail, and industrial sectors.
Harsco operates in an intensely competitive landscape that includes big players such as POSCO (PKX) and Companhia Siderurgica Nacional (SID). Harsco currently has a Zacks Rank #5 (Strong Sell). One of its competitors, Commercials Metals Company (CMC) carries a Zacks Rank #2 (Buy).
More From Zacks.com