SAIL to increase production by 14 MTPA in two years

 Steel behemoth SAIL is set to invest Rs 72,000 crore over two years to raise its production capacity from 14 million tonnes per annum to 24 MTPA as part of ambitious expansion and modernisation plans.

"By the end of 2013, SAIL's annual production would be enhanced to about 24 MT from the existing 14 MTPA. For this, Rs 72,000 crore is being invested on expansion programmes," SAIL Chairman C S Verma told reporters here.

The modernisation and expansion work will be completed in a phased manner at all of SAIL's steel plants, in sync with the company's strategy of raising its capacity to 40-60 MT per annum after eight years, as per its 2020 vision document, he said.

Out of the Rs 72,000 crore, an amount of Rs 10,500 crore would be spent by the Raw Material Division (RMD), Verma said, while Rs 56,000 crore will be spent on purchasing machinery for expansion and modernisation of units. About Rs 32,000 crore has already been spent.

An amount Rs 12,000 crore would be invested for completion of expansion and modernisation of the Rourkela Steel Plant (RSP) in a phased manner to increase capacity from 2 MTPA to 4.2 MTPA, the SAIL chief said.

On natural gas allocation, the SAIL chairman said all statutory provisions were met. As forest and environment norms in mining activities have become more stringent, SAIL is ensuring compliance with the guidelines to secure licences.

To a query on the Jagdispur steel plant in Uttar Pradesh, he said construction work is nearing completion. However, the power plant is yet to be set up.

Verma declined to offer a projection on the company's expected profit during the current fiscal.

To another question, the SAIL chief said no concrete step has so far been taken on the proposed take-over of Nilachal Ispat Nigam Ltd in Odisha by SAIL, but expressed optimism on a possible tie-up with Posco.

"We are hopeful of having a Posco-SAIL joint venture and discussion is on," he said.With respect to environmental issues connected to mining activity, Verma said SAIL is producing 1.8 MT per annum of iron ore from its Chidiya mines in Jharkhand without disturbing bio-diversity.

He also SAIL is also undertaking development works in mining belts where activities of Maoists have been reported. "We have to win over their hearts by undertaking CSR activities in these areas and start mining," he said.

On coking coal sourcing, the SAIL chief said the company is exploring the possibility of importing coking coal from abroad and has opened an office in Indonesia in this regard. SAIL's coking coal requirement is 14 to 15 MT per annum and is slated to go up to 20 MT per annum.

The SAIL Chairman said import duty on stainless steel should increase as other countries are dumping steel materials in India because of low import duty. Steel demand in the country is as high as 55 kg of steel per capita in urban areas, while it is 10 kg in rural parts of the country.

On the Rourkela Steel Plant, he expressed satisfaction over ongoing modernisation work. The new sinter plant will start operation after two-and-a-half months and the new blast furnace No. 5 will start trial runs in July, 2012, he said.