Rashtriya Ispat Nigam Limited Chairman-cum-Managing Director P. Madhusudan on Tuesday said the Centre’s decision to impose Minimum Import Price (MIP) for steel industry had shown immediate impact in raising the demand for steel in the domestic market.
Following fervent appeals by major steelmakers, the Director-General of Foreign Trade issued a notification on February 5 levying MIP ranging from $241 to $752 per tonne on with immediate effect mainly to discourage Chinese products from flooding the domestic market.
RINL, the corporate entity of Visakhapatnam Steel Plant, is at present adding one million tonne with an investment of Rs.7,500 crore. Simultaneously, the units expanded under Rs.12,500-crore project are being ramped up.
Though the country has a production capacity of 110 million tonne, the steel plants due to slump in the economy and flooding of Chinese products, had imposed a cut in production by 15 to 20 per cent. “Full capacity utilisation and increase in production by 10 to 12 million tonne will make us self-sufficient in meeting our nation’s demand,” Mr. Madhusudan told The Hindu .
He said the per capita consumption of steel, which is now at 60 to 62 kg in urban areas and 10 to 12 kg in rural areas was abysmally low compared to global average of 250 kg. “The decision on MIP and thrust accorded to infrastructure in General Budget will help the industry to bounce back with significant appreciation in demand,” he remarked.
He said they were awaiting clearance from the Ministry of Mines to undertake mining of iron ore in Kukunoor area of West Godavari as a joint venture with the AP Mineral Development Corporation.
Preferential status
Asked to comment on their representation to the State government to accord preferential status to Vizag Steel – the products of RINL, Mr. Madhusudan said they were expecting favourable response shortly. “Not only capital, the projected housing boom in the neighbourhood will also create huge demand for steel,” he stated.
Admitting that Singaporean companies would mostly prefer pre-fabricated material, he said as they had a memorandum with Shapoorji and L&T which had been awarded the task of building the Secretariat, Vizag Steel would be asked to meet their requirement due to landing cost advantage. He said if required to meet the demand for pre-fabricated steel for sky-rise structures, they might consider foraying into flat steel production.
Full capacity utilisation and increase in production by 10 to 12 million tonne will make us self-sufficient in meeting our nation’s demand
P. Madhusudan
CMD, RINL
