Domestic firms need to boost capacity to meet steel policy goals: Anil Kumar Chaudhary, Chairman, SAIL

Having implemented its Rs 72,000-cr expansion programme to a large extent, SAIL has in its crosshairs the Centre’s target of 300-MTPA capacity by 2030-31, chairman Anil Kumar Chaudhary said to the Financial Express.

The Steel Authority of India, the country’s largest public sector steelmaker, has been in the steel business for more than 60 years. The company has made a turnaround, clocking a net profit in the financial year 2018-19, after three consecutive years of losses.

SAIL’s massive modernisation and expansion programme, which aims to enhance its steel-making capacity to 21 MTPA, envisaged an outlay of more than Rs 70,000 crore. With the company in advanced stages of ramping up production from its new facilities, the loans are gradually being repaid and the debt-equity ratio is improving. The borrowings of the steel behemoth are a healthy mix of short- and long-term loans.

All the new facilities planned under the modernisation and expansion programme have been installed. SAIL is now in the process of ramping up production from these facilities, an exercise that will take some time. The target of the modernisation and expansion programme was to have an installed crude steel capacity of 21 MTPA.

SAIL’s agenda is aligned with the country’s vision of attaining 300-MTPA capacity by 2030-31. As this represents a huge leap from the current capacity of 140 MTPA, every domestic company would need to enhance capacity if the goals of the National Steel Policy-2017 are to be met.

The company’s total iron ore requirements are met through captive mines, with calendar year 2019 witnessing its mines achieve the highest-ever output of 28.53 million tonnes of iron ore. As for coking coal, like other domestic steelmakers, the company needs to import a large quantity to supplement what it can procure locally. This is a challenge, especially owing to volatility in coal prices.

SAIL has also set up International Coal Ventures (ICVL), a joint venture with RINL, NMDC, CIL and NTPC (all PSUs), to acquire mining assets abroad. ICVL has acquired coal mines and assets in Mozambique with net coal reserves in excess of 500 million tonnes.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

Leave a Reply

Your email address will not be published. Required fields are marked *