SAIL Away Again: How India’s State-Owned Behemoth Plans to Stay on Top

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Part of the US $9 billion from the Steel Authority of India (SAIL)’s 2012 capital program was slated to be used on the expansion of SAIL’s hot metal production capacity to 23 million tons a year by 2014-15 from the present 14 MT.

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India’s largest public sector steel giant has now acknowledged that it had already put in place plans to market the additional volumes of steel when it will be rolled out of its newly integrated steel plants later this year.

A report in the Daily Mail quoted company Chairman C.S. Verma as saying he foresaw the fresh thrust on infrastructure growth in India translating into higher demand for steel. Good news not only for India’s steel sector but also for SAIL, which will be ready and present when resurgent demand finally shows up.

SAIL has gone for a strategy of developing new products to gain an edge over rivals. This includes value-added steel products used for manufacturing automobiles, consumer durables, defense and railway equipment.

The steel giant recently claimed it was close to completing an approximately US $2.2 billion expansion plan at its Rourkela Steel Plant in India’s eastern state of Odisha, which is expected to push capacity to 4.5 MT per year from the existing 2 MT.

As part of this, on Monday, SAIL announced that the new basic oxygen furnace (BOF) converter and the new plate mill at its Rourkela plant had already commenced operations.

SAIL said it would now pursue plans for this plant’s further expansion to 10.8 MT per year as part of its blueprint to attain an overall capacity of 50 MT per year by 2025. As part of the plan, some of the new lines, such as the 3 million-ton-per-annum hot strip mill and the beneficiation and pelletization plant has already been contracted out to builders.

A report in LiveMint recently told of India’s biggest manganese ore producer, Moil Ltd., considering a three-way joint venture with the country’s two biggest state-owned steel makers—SAIL and Rashtriya Ispat Nigam Ltd (RINL)—to set up a ferro-alloy plant in central India.

The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.

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