Companies

SAIL to ready Burnpur facility this year

Vishwanath Kulkarni New Delhi | Updated on April 17, 2011

Mr C.S. Verma, Chairman, SAIL   -  Business Line

Steel Authority of India Ltd expects its installed capacity to increase by about two-third to 24 million tonnes (mt) by the end of 2012-13.

This is when its much talked about Rs 70,000-crore modernisation and expansion (M&E) plan is expected to be completed.

Of this, about Rs 10,500 crore is being spent on mechanising the mines, says Mr C.S. Verma, Chairman, SAIL.

According to him, “About 80 per cent of the proposed (M&E) investment has already been committed and orders have been placed.”

SAIL expects to commission its Burnpur facility this year, which will increase its capacity by 3 mt. SAIL produces around 14 mt of steel and accounts for 20 per cent of the country's output, estimated at 70 mt.

Mr Verma expects steel demand to continue to grow ahead of the GDP rate at around 10 per cent. He estimates that domestic demand will touch 110 mt by 2012, 180 mt by 2020 and some 500 mt by 2050.

The PSU steel maker's long-term strategy is to scale up its capacity to 60 million tonnes by 2020. The proposal to increase the output has been discussed by the SAIL board, Mr Verma added.

High input costs

Commenting on the increase in input cost, especially that of coking coal, Mr Verma said all steel producers in the country have been affected by the recent price rise. Due to the recent flooding of mines in Australia, coking prices had shot up to over $300 a tonne from around $220 levels.

Stating that such a hike was not sustainable, Mr Verma said the prices had to fall and that he expects them to stabilise in the next one to two months. “The situation in Australia is getting near normal as the mines are expected to restart operations over the next one to two months,” he said.

Published on April 17, 2011

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