‘Govt willing to support secondary steel producers’

Steel demand always moves in cycles. In the last four years, steel demand has gone up by 14 per cent. In our Steel Policy 2017, we made it clear that transfer of technology is welcome. This has encouraged steel companies in Japan to consider brownfield expansion. Most of the PSUs have ample space, which can be used by any company without hassles. Foreign companies can partner with PSUs to set up units.

Things have changed since the Posco episode unfolded in Odisha. There were three-four reasons why they could not make it. Now they are showing interest in India again. They are making enquiries with RINL (Rashtriya Ispat Nigam Ltd) and SAIL. Other foreign companies have also shown interest.

We are not just looking at just integrated steel players. The secondary steel is more important. That commands 57 per cent of total production capacity. In three-four years, its market share can grow to 70 per cent with right kind of support from the government.

Secondary steel companies can generate three times more employment than integrated steel plants. They are more keen on raw material security. The secondary steel producers want iron ore to be supplied through their association so that they have some supply guarantee. The government is ready to support them and open to consider their demand.

The problem over funding from banking system is a closed chapter. In the debt-resolution process, banks are very happy that they could recover more money. The NPA of secondary steel producers will not even be three-four per cent of entire steel sector. The secondary steel producers are keen to ramp up their capacity from 30,000 tonnes to 2 lakh tonnes. Banks would be more interested to lend to secondary steel producers if they achieve the 2 lakh tonne size.

(Laughs) Banks are enjoying haircut. In the case of Bhushan Steel, the recovery has been 70 per cent. In the Essar Steel case, the promoters have quoted the entire amount. The disturbance caused by NPA to this industry is over. One should understand, that steel is a capital intensive industry.

If you start making profit, it will be huge and similarly losses can drain you down. Ruias have understood that this kind of plant cannot be built even in 10 years. The generation to come would appreciate the resolution process under Insolvency and Bankruptcy Code.

We have lot of land available. About 5-6 PSUs own about 80,000 acres of land and not even 20 per cent is used. The rest of the land can be used for brownfield expansion. Greenfield steel projects take five years and who would wait for so long?

India has signed Free Trade Agreement with South Korea and Japan. Automobile companies import 80-90 per cent of their components comes from there. Companies like Maruti and Hyundai get all kind of components under FTA. We may not call ourselves big brother, but we are almost there. We need to have balance in trade with other countries. BIS standard has been implemented on 86 per cent of products and we want to implement it on all products.

We have a legislation pending moved by the Transportation Ministry which is limited to vehicles. If this is withdrawn we can submit our legislation which will cover recycling of every metal. We are only waiting for withdrawal of the previous Bill. There is only one recycling unit set up by Mahindra and MSTC in joint venture. We need to have 50-60 recycling units. We need to get Cabinet approval for our scrap policy Bill. Now that we are more concerned about election it may take some time.

COMMENT NOW