The Hindu Business Line : SAIL to see 9 pc growth in domestic sales at 9.6 mt

STEEL Authority of India Ltd (SAIL) will be selling approximately 9.6 million tonnes of steel in the domestic market during the current financial year (2004-05) against 8.8 mt in the last fiscal.

The public sector steel major will be registering a growth of 9 per cent in its domestic sales against the average growth of 7-8 per cent of the Indian steel sector.

Despite this robust growth in the current financial year, SAIL will be just failing to meet its internal domestic sales target, pegged at 9.7 mt, because of the coking coal shortage it suffered at the beginning of the current fiscal.

According to Mr S.K. Roongta, Director (Commercial), this was beyond the control of the company. He said that all the four integrated plants of SAIL suffered from coking coal shortages in the first two quarters, but these units were fast making up in the second half of the year.

"The difference between the internal target and actual performance is only 0.1 mt and we hope to make it up in the last month of this fiscal," Mr Roongta told reporters at a press conference on Thursday.

Talking about steel prices, he said they were likely to remain stable till September, this year. When asked whether SAIL would be increasing prices, he said that would depend on the market forces.

SAIL had re-oriented its production and marketing strategies to cater to the growing demands of the domestic industry. In the last quarter, the company was expecting a 10 per cent growth on a year-on-year basis.

"Because of judicious use of production facilities and appropriate product mix we were able to generate approximately Rs 500 crore of extra revenue during the first nine months of this year," he said.

The company had increased its direct sales to customers bypassing the trading channel. From 75 per cent the proportion had increased to 83 per cent and Mr Roongta felt the ideal level was 85 per cent.

During the current financial year, SAIL had succeeded in reducing the share of semi-finished products in its total output and in increasing that of value added items. As a result, the share of finished in SAIL's total sales had increased to 89 per cent from 86 per cent.

The company registered growth in almost all sectors. TMT bars grew by 30 per cent; hot-rolled products by 15 per cent; sales to governmental and public sector bodies by 24 per cent. SAIL's business with small-scale sector increased by 70 per cent.

"We have realised that there is a huge market for value-added products. We are concentrating on these items. In fact, in 2004-05 the business involving value added items increased by 40 per cent," he added.

SAIL had also deliberately cut down its exports from 1.1 mt in 2003-04 to 40 lakh tonnes in 2004-05 to meet domestic market requirements.

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