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Home arrow News arrow Business News arrow SAIL to place maximum thrust on capacity addition: C.S. Verma
SAIL to place maximum thrust on capacity addition: C.S. Verma Print E-mail
Written by Viswanath   
Tuesday, 27 September 2011
New Delhi: Notwithstanding the uncertainties in the global environment today, the Indian steel industry is poised for greater growth, catapulting India to the league of highest steel consuming nations of the world in the next decade, said C.S. Verma, Chairman of Maharatna Steel Authority of India Limited (SAIL), at the company's 39 th Annual General Meeting held here.

Keeping this in view, and to maintain its market dominance both in the short and long term, SAIL will continue to place maximum thrust on capacity addition, for which capital expenditure will be made "with positive and upbeat sentiments", Verma disclosed.

"Cumulative orders worth about Rs. 54,000 crore have already been placed under SAIL's ongoing modernisation & expansion (M&E) plan to realise hot metal production capacity of 23.5 million tonnes by FY '13," he informed the shareholders. "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 modernisation & expansion, 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 m 3 Blast Furnace at Rourkela, which would be the country's largest, a 5 lakh tonne per annum Wire Rod Mill at Burnpur, a 1.2 million tonne per annum (mtpa) cold rolling mill at Bokaro and 7-metre-tall coke oven batteries at Rourkela and IISCO Steel Plants.

Mr. Verma apprised 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 utilise low-grade iron ore, dumped fines and slimes, SAIL plans to set up beneficiation & pelletisation facilities, including a 10 mtpa beneficiation and 4 mtpa pelletisation plant at the company's Gua Iron Ore Mines," he revealed. Mr. 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 towards sourcing raw materials from abroad.

Speaking about the company's performance in the recent past, the SAIL Chairman informed 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 pointed out. SAIL's profitability, though, was impacted due to sharp escalations in input prices, particularly imported coking coal, on account of which the company had to bear a whopping 66% cost increase. Mr. Verma, however, expressed satisfaction over the 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.

To meet future challenges, 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. A pproval given by the Cabinet Committee on Economic Affairs in its meeting held last month for revival of the Sindri unit of Fertiliser Corporation of India Ltd (FCIL), for which SAIL has been selected on nomination basis as lead shareholder, has bolstered SAIL's efforts towards attaining 'Lakshya 2020', stated Mr. 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 of along with suitable JV partners," he added.

"SAIL is growing and is poised for a big leap," Mr. Verma told the shareholders while sharing details of the multi-pronged growth initiatives being taken by the company. 'Technology leadership', he said, has been identified as a key focus area. He dwelt upon the strategic initiatives taken to augment technological interventions, among which is the newly-launched R&D 'master plan' of SAIL aimed at facilitating "acquisition and development of appropriate technologies for sustainable growth". The other initiatives, he revealed, related to SAIL'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 & 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 finalise the terms & conditions of the joint venture.

Underlining SAIL's commitment to development of rural India, the SAIL Chairman spoke about the company's recently introduced Rural Dealership Scheme which was aimed to encourage use of quality steel items in predominantly rural areas, and to increase the penetration of the company's branded products in the country's hinterland. "The initiative is also important in view of the fact that rural consumption is likely to grow substantially from present level of 10 kg per capita per annum," he pointed out.

Shareholders of SAIL will be paid a total dividend @ 24% of the company's paid-up equity share capital for financial year 2010-11, amounting to Rs. 1,152 crore, including dividend tax.

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