Upbeat about the shaping of the steel industry, state-run Steel Authority of India (SAIL) on Wednesday announced that it had earmarked Rs. 45,000 crore for capacity addition during the 12th Plan (2012-17). This is big increase from the Rs. 40,312 crore spent during the 11th Plan.
“SAIL has pegged outlay on modernisation and expansion during the 12th Five-Year Plan at Rs. 45,000 crore, including Rs 14,500 crore during the current year,’’ SAIL said in its latest annual report. SAIL, which clicked a record Rs. 50,000 crore turnover during 2011-12, spent Rs. 40,321 crore on modernisation and expansion during the 11th Plan Period, including Rs. 11,000 crore in the last fiscal.
In a letter to the shareholders of the company, SAIL chairman C.S. Verma said the steel industry requires continuous capital investments for technological up-gradation and addition, modification of its capital assets which are essential to maintain the market competitiveness and meet the challenging needs of customers. “The growth plan, besides targeting higher production, also addresses the need for eliminating technological obsoleteness achieving energy savings, enriching product-mix, reducing pollution, developing mines, introducing customer centric processes and developing matching infrastructure facilities,’’ it adds.
SAIL is in the midst of expanding its crude steel production capacity to 21.40 metric tonne per annum (mtpa) from 12.84 mtpa now with a huge Rs. 72,000 crore investment. In addition, it plans to invest Rs. 131,000 crore to raise capacity from 21.4 mtpa to 45 mtpa. SAIL has been meeting its investment needs mainly through internal generations and as a result, its debt-equity ratio has gone down to 0.41:1, as on March 2012.