Will effectively assist in mitigating risks existing in the volatile shipping market
Steel Authority of India Limited (SAIL) on Monday signed an agreement with Shipping Corporation of India Ltd. (SCI) for setting up a 50:50 joint venture company. Under the agreement, the new company will primarily take care of SAIL's shipping needs by owning and operating ships.
The agreement was signed by SAIL Director (Finance) Soiles Bhattacharya and SCI Director (Technical & Offshore Services) U. C. Grover in the presence of SAIL Chairman S. K. Roongta and SCI Chairman S. Hajara.
The joint venture, which will be registered at Kolkata and initially cater to around 10-lakh tonnes of SAIL's imported cargo annually, will be expanded subsequently. SAIL annually imports around 10 million tonnes of coking coal, a major input for steel making. The company's requirement of imported coking coal would increase considerably in the coming years in view of the ongoing expansion plan of SAIL that will nearly double SAIL's hot metal production capacity. The shipping venture would enable SAIL to have control over part of its coking coal supply chain and effectively assist SAIL in mitigating risks existing in the volatile shipping market. SCI, which will bring its expertise in the shipping arena to the joint venture, is already in the process of acquiring new vessels, and the joint venture will give its efforts a further boost.
According to SAIL Chairman S. K. Roongta: “We are keenly focussed on ensuring its long-term raw material security and will continue to give thrust on logistics facilities and creation of infrastructure for smooth flow of raw materials and movement of finished products.”