IFGL Refractories, which clocked a turnover of Rs 600 crore last fiscal, has scaled down its growth target for 2012-13 in view of the slowdown in the global as well as domestic steel industry.
“This fiscal, we were targeting around 20 per cent growth, but unfortunately the steel industry has slowed down ... First half was not bad, but second half we see a major slowdown. So we would be lucky if we make a 10 per cent growth (in turnover),” IFGL Refractories’ Managing Director Pradeep Bajoria told PTI.
“Even in India, with issues in mining, many companies are cutting production,” Bajoria said.
He said, however, that the steel industry in India was still strong compared to its global peers and was hoping that some capacity addition would happen despite the slowdown.
“Main increase in turnover is expected to come from India... People have set up a lot of capacity... In SAIL, lot of expansion is going on. Then, we expect business from the US and have also started marketing in CIS countries,” Bajoria said.
He added that although in the near term, the world steel picture is looking bleak, the Indian steel story would remain strong.
“In the long run, in India steel will be a good industry. I think government will have to get its act together regarding this mining issue... People have problems with iron ore, coal, so the cost of production is high and even the infra is not doing too well so the demand side is very weak,” he said.
Recently, the World Steel Association has forecast a 2.1 per cent growth in global steel demand this year, which is considerably lower than 6.2 per cent growth in 2011.
For India, it said 5.5 per cent growth in demand was expected in 2012 and it would come down further to 5 per cent in 2013 “due to both unfavourable domestic and external economic conditions’’.
Apparent steel use in India was estimated to be at 73.6 million tonnes in 2012 and 77.3 mt in 2013, World Steel said.
Asked if the company was prepared to face the expected growth in demand in the long-term, Bajoria replied in the positive.
“We are prepared to meet the demand, we have set up a new plant in Kandla, Gujarat, hoping that will be utilised mostly for exports. We have also planned to increase capacity in the US,” he said.