Now, there will be a little bit of SAIL in cars

With the rapidly growing domestic auto industry turning out to be a lucrative market for steelmakers, state-owned company Steel Authority of India Ltd (SAIL) has come out with elaborate plans to make auto-grade steel.

Mr C S Verma, Chairman, SAIL told Business Line that as part of its close to Rs 70,000 crore modernisation programme, it is setting up a new Cold Rolling (CR) Mill with a 1.2 million tonnes per annum (MTPA) capacity. This mill will be built at its Bokaro plant and would primarily target auto and the white goods industry.

“We believe the steady growth of the auto sector is a key driver for steel demand going forward, particularly for CR products. SAIL’s major flat steel producing plant at Bokaro is expanding its volume while upgradation of technology is also being undertaken.

A new Cold Rolling Mill is being set up with coupled pickling and tandem mill, 100 per cent hydrogen annealing, electrolytic cleaning line, tension levelling and automatic packing stations, etc. Also, galvanising lines are being set up both for Hot Rolled (HR) and CR products. Provision has been made for supplying of HR pickled and oiled material. Necessary upstream projects like facilities for de-sulphurisation and upgradation of Hot Strip Mill is also on the anvil,” he said.

According to industry analysts, demand from the auto sector accounts for about 10 per cent of total steel supply by Indian producers. Most Indian automakers, however, import large quantities of auto-grade steel from companies in countries like Japan and Korea. In India, Essar Steel and Tata Steel are the biggest suppliers to the auto industry.

Other steelmakers have also announced fresh investments for producing auto-grade steel in India. Among them, Korean firm Posco has indicated an investment of $284 million for a 1.8 MTPA cold-rolled steel plant in Maharashtra. Japanese company Nippon Steel is also investing Rs 164 crore on an auto steel pipe plant in Rajasthan. Both these facilities will come on-stream by 2012.

SAIL’s R&D Centre has already developed grades required for chassis and under-the-bonnet components. Once the facilities for skin body sheets are available, SAIL is confident of developing materials for that too, said Mr Verma.

“We expect the new facilities will be able to supply to almost all requirements of auto grade steel that is hot rolled, cold rolled and galvanised, except for the skin components for which IF grade steel is required. However, in the second phase of expansion of the Bokaro Steel Plant, when the older SMS-I will make way for SMS-III, facilities will be added at the steel melting stage so that SAIL is in a position to meet the required steel grades of skin component also. In that phase of expansion, a colour coating line is also envisaged. With these facilities in place, SAIL will be able to cater to the requirements of chassis, under-the-bonnet components, and later to outer body sheets as well,” he said.

roudra.b@thehindu.co.in