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SAIL Chairman Says Company is Poised for Growth

09/26/2011 - C.S. Verma, Chairman of Maharatna Steel Authority of India Limited (SAIL), believes that the Indian steel industry is poised for greater growth. As a result, SAIL plans to continue its focus on capacity addition.

C.S. Verma, Chairman of Maharatna Steel Authority of India Limited (SAIL), believes that the Indian steel industry is poised for greater growth, with India becoming one of the highest steel-consuming nations of the world in the next decade.
 
As a result, SAIL plans to continue its focus on capacity addition, for which capital expenditure will be made "with positive and upbeat sentiments," Verma said. "Cumulative orders worth about Rs. 54,000 crore have already been placed under SAIL's ongoing modernization and expansion (M&E) plan to realize hot metal production capacity of 23.5 million tonnes by FY '13," he informed shareholdersat the company's recent Annual General Meeting. "While capital expenditure of Rs. 11,280 crore was incurred during 2010-11, an outlay of Rs. 14,337 crore has been planned for the current year. After having completed Salem Steel Plant's M&E, several projects in all the five integrated steel plants of SAIL are under various stages of completion."
 
Among major new facilities due to be commissioned during 2011-12 are a 4060-m3 Blast Furnace at Rourkela, which would reportedly be the country's largest; a 500,000 tonne per annum Wire Rod Mill at Burnpur; a 1.2 million tonne per annum (mtpa) cold rolling mill at Bokaro; and 7-meter-tall coke oven batteries at Rourkela and IISCO Steel Plants.
 
Verma told SAIL shareholders that the company is determined to meet its enhanced requirement of iron ore from captive sources, by augmenting production from existing mines and by developing new mines at Rowghat in Chhattisgarh and Chiria in Jharkhand. "To utilize low-grade iron ore, dumped fines and slimes, SAIL plans to set up beneficiation and pelletizing facilities, including a 10 mtpa beneficiation and 4 mtpa pelletizing plant at the company's Gua Iron Ore Mines," he said.
 
Verma further disclosed that, besides developing existing coal blocks, SAIL has also made efforts for fresh allocation of coking coal and thermal coal blocks. The company's MoU with the government of Central Kalimantan in Indonesia is among its various efforts toward sourcing raw materials from abroad.
 
Speaking about the company's recent performance, the SAIL Chairman said that "Fiscal 2010-11 represented relentless improvements in production, product-mix, and efficiency parameters" with respect to the previous year. "The company's sales turnover of Rs. 47,041 crore in 2010-11 was the second highest in its history and higher by 7% over the previous year," he said. SAIL's profitability, however, was impacted due to sharp escalations in input prices, particularly imported coking coal, on account of which the company had to bear a 66% cost increase. Verma noted there’s been a trend of imported coking coal prices coming down from an unprecedented high level of US$330 per tonne in the first quarter of 2011-12 to around US$280 in the third quarter.
 
SAIL is also working on a long-term strategic plan Lakshya 2020, "which will steer the company towards meeting its strategic objectives of achieving profitability through growth and customer satisfaction," he said. Approval given by the Cabinet Committee on Economic Affairs in its meeting held last month for revival of the Sindri unit of Fertiliser Corp. of India Ltd. (FCIL), for which SAIL has been selected on nomination basis as lead shareholder, has bolstered SAIL's efforts toward attaining Lakshya 2020, said Verma. SAIL has set up a working group to draw up "plans for setting up a 5.6 mtpa steel plant, 1.15 mtpa urea plant, and 1000 MW power plant at the site along with suitable JV partners," he added.
 
Technology leadership has been identified as a key focus area for the company. The other initiatives, according to the SAIL Chairman, related to the company's MoUs with global players such as Kobe Steel of Japan and Posco of Korea: "The pre-feasibility report for setting up of 0.5 million tonne per annum facility using Kobe Steel's patented ITmK3 technology for producing premium-grade iron in the form of nuggets has been prepared, and the terms and conditions of the proposed joint venture are being worked out. There is a comprehensive strategic alliance with Posco for setting up a Finex technology-based plant, for which a detailed project report has been prepared and discussions are on to finalize the terms and conditions of the joint venture.”