SAIL steels up Rs 35,000 cr plan

NEW DELHI: State-owned Steel Authority of India Ltd (SAIL) will invest Rs 35,000 crore in the next five years to enhance capacity to 22.5 million tonne (mt) from 14 mt now. The investment would go into both greenfield and brownfield projects. It would also be utilised for improving the quality of raw materials and acquiring captive mines.

The investment amount is significant as it would be the first time since the 1990s that a government company is investing in such a huge scale for capacity enchancement.

The only major expansion that had happened in the steel sector was in Rashtriya Ispat Nigam Ltd’s plant.

Revealing this at a press conference, Union steel minister Ram Vilas Paswan said the domestic steel industry would make investments to the tune of Rs 1 lakh crore for enhancing capacity to 65 mt from the current 45 mt.

SAIL would raise its production during the current financial year by 1 million tonne. SAIL chairman VS Jain told reporters that the company usually opted for a shutdown and realignment of blast furnace during April-June.

According to Jain, coal prices during 2005-06 were 30% higher, resulting in an extra outgo of Rs 1,400 crore, though product prices were down by about 27-28%.

“Coal prices have since come down and steel prices are improving,” said Jain. He said the net realisation for the company had come down by 18-19% during the fourth quarter.