Steel Authority of India Ltd. (SAIL) hopes to emerge as a global company in the next few years, Chairman Chandra Shekhar Verma said. Even as the company races to complete its Rs.72,000-crore modernisation plan, it has put in place a perspective plan to increase the capacity to 60 million tonnes by 2020 from the present 14 million tonnes. “Our target is to take the company from being a domestic player to a global brand,'' Mr. Verma told this correspondent.

Global ambitions

Mr. Verma said the stakeholders of the company would see the emergence of a global SAIL in the months to come. To realise this game plan, the company was working on multiple fronts at the international level by adopting the inorganic route and going in for strategic tie-ups aimed at backward, forward and lateral integration. The strategy hinged on ensuring domestic and overseas raw material security through the acquisition route while marking a footprint overseas through greenfield units in mineral-rich countries. On the scanner are countries like Mongolia and Indonesia for units and Australia for acquisition of properties. At least one deal for coking coal was likely within this fiscal, he said.

In times where securing raw material supplies are central to existence, tie-ups with rival domestic companies are no longer a taboo and Mr. Verma said discussions had been held with Tata Steel, JSW, JSPL, RINL and Bhushan Steel and others for the Hajigak mines in Afghanistan where SAIL had already bid.

SAIL secures iron ore from its captive sources and the recent environmental clearance given by the government for mining in the Chiria mines in Jharkhand had also strengthened its position, Mr. Verma said. In Chiria, SAIL had sought forestry clearance for about 25 per cent (595 hectares) of the total leasehold area to start mining operations, for which stage-I forestry clearance had been provided. Environment clearance for Budhaburu, the biggest lease of Chiria (824 hectares), had also been granted.

Development activities for setting up a 14 million tonnes per annum (run-of mine) mechanised mine were under progress at Rowghat to meet the Bhilai Steel Plant's long-term iron ore requirement. Only 30 per cent of the coking coal requirement was met from indigenous sources he said. To reduce dependence on increasingly costlier imported coal, SAIL had laid a thrust on developing the coal-blocks allocated to it by the government besides expanding production from captive collieries.

The ongoing phase of modernisation to increase the capacity from 13.82 million tonnes to 23.50 million tonnes with an investment of about Rs. 72,000-crore, including modernisation and expansion of iron ore mining capacity, would be completed by 2012-13. A milestone-based monitoring system was being put into place, Mr. Verma said. Referring to the 2020 plan, Mr. Verma said that dovetailing with the government's plans to increase the domestic steel production capacity to 180 million tonnes by 2020, SAIL too was putting a perspective plan in place to raise the production capacity to 60 million tonnes by 2020.

“Our target is to take the company from being a domestic player to a global brand. SAIL also plans to increase its share in the domestic market from the present 19-20 per cent to one-third of the market for steel.''

On SAIL's strategy for staying ahead at a time when its competitors too are racing ahead with their expansion plans, Mr. Verma said the company's people-focus had led to highest-ever labour productivity of 241 tonnes a man. SAIL also planned to increase the share of value-added products in its product basket, from the present 38 per cent to around 50 per cent.

Mr. Verma said SAIL had tied up with top steelmakers such as Nippon Steel, POSCO and Kobe Steel for joint ventures. SAIL was working with Kobe Steel of Japan to install a 1.5 million tonnes steel plant based on gas-based DRI technology and using electric arc furnace for steel-making with value-added products at Jagdishpur in Uttar Pradesh. The feasibility of setting up a 1,000-MW gas-based power plant was also being examined.

“SAIL is in talks with different governments like Mongolia and Indonesia for setting up steel projects. We are aggressively pursuing equity participation with existing leading coal mining companies. Due diligence of some coal assets is in progress and we hope to finalise these shortly. At present, I would not like to comment on any proposed tie-up with Arcelor.''

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