|
SAIL obtains management control of Steel Complex Ltd in Kozhikode, Kerala |
|
Written by Anand
|
|
Thursday, 17 February 2011 |
New Delhi: Steel Authority of India Limited (SAIL) formally took over the operations of Steel Complex Limited (SCL) in Kozhikode held by the Government of Kerala (GoK), with the acquisition of 50% of the shares of SCL.
The joint venture company resulting from the acquisition, SAIL-SCL Limited, will invest Rs. 45 crore to set up a new rolling mill of 65,000 tonnes per annum capacity for producing high grade (Fe 500 & above) TMT bars.
SAIL-SCL Ltd presently has the capacity to produce 55,000 tonnes of liquid steel per annum through the electric arc furnace route and 50,000 tonnes of concast billets per year.
The JV aims to tackle issues such as shortage of working capital and non-availability of good quality scrap by ensuring uninterrupted supply of scrap to maintain efficiency of operations and adding value to its products by converting billets into TMT bars.
The possibility of marketing SCL products by harnessing SAIL’s nationwide dealer network is being explored.
On the request of the GoK, SAIL had signed an MoU in May 2008 for revival of SCL, owned by the state government. Subsequently, a JV agreement was signed between GoK and SCL in December 2008 to enable acquisition of shareholding by SAIL, development of SCL by setting up a rolling mill and fulfillment of certain terms & conditions by the state government. Subsequent to fulfillment of conditions of the agreement, the JV became operational in Dec. ’10. Operations of the JV will be synergised with SAIL’s core strengths by installation of billet conversion facility, raw material tie-ups and marketing of SCL products by SAIL.
The JV is expected to be a milestone in the Government’s policy of bringing together synergies of PSUs and strengthening them to be competitive in the market. |
