The Hindu Business Line : Coking coal crunch shrinks SAIL sales

DESPITE the bullish trend, Steel Authority of India Ltd (SAIL) has suffered a sales drop of 10-15 per cent during the first quarter of 2004-05, due to coking coal shortage.

SAIL has also reduced its annual sales target from 12 million tonnes to 11.5 million tonnes for 2004-05.

Mr. S.K. Roongta, SAIL's Director (Commercial), agreed that the company has received "minor setbacks" in its sales during 2004-05 but he preferred not to quantify it.

Sources in SAIL headquarters confirmed this development and added that this "setback" is to the extent of 10-15 per cent in terms of volume. In value terms, however, there is hardly any impact.

"This is mostly due to the coking coal crisis that the SAIL plants are facing since the last quarter of 2003-04. However, we are confident of making it up by the end of the year," sources said.

According to Mr Roongta, SAIL's annual sales target for 2004-05 is 11.5 million tonnes. SAIL has targeted a six to seven per cent growth per annum and in 2003-04 the company had sold 11.4 million tonnes of steel. Hence there is hardly any increase in sales target for the current fiscal.

"Apart from the coking coal crisis there is another aspect. In 2003-04, the average capacity utilisation of the plants was 104 per cent. The question is how far can we stretch the existing capacities to meet six per cent growth rates?" a senior SAIL official asked.

Regarding the coal price hike, Mr Roongta said, SAIL, which consumes four million tonnes every year, has a bilateral agreement with Coal India. "We are negotiating with the prices. For us it would not be as high as it was announced", he said.

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