The steel minister is eyeing a double-digit growth for production, consumption and exports of Indian steel in the next two years. He wants steel PSUs to do better with right product-mix. In an interview with Surya Sarathi Ray of FE, Birender Singh shares his vision. Edited excerpts:
Despite government’s measures, the two steel PSUs are incurring losses. What have you advised them?
There has been lot of difficulties for the last 3-4 years for the industry due to dumping of steel. This has been a global phenomena, though. Now, we have come out of that. It’s true that the private sector has made much headway in the present scenario, but our PSUs have also tightened their belts to a great extent. SAIL has made cash profit for the last four consecutive quarters. There is an improvement in the working of RINL also, though a lot has to be done. Crude steel should no longer be main thrust area. They should make more value-added steel.
Are you planning to appoint an outside agency to check what is going wrong with SAIL or RINL?
I assume SAIL has appointed one agency to find out how to come out with this kind of situation which is prevailing now. They are getting help from MECON.
Any issue with leaderships in these two PSUs?
There are so many factors for this kind of situation in SAIL or RINL. Of course, leadership is also an issue. The more the production, the less the losses. They should not have taken so much time to complete their modernisation and expansion works.
Corruption is an issue which our government has been able to bring down drastically but it is yet to be eliminated. I want the entire tendering system of our PSUs to be refashioned, reviewed and revisited. You have to do away with corruption. It should be applicable to procurement of plant, machinery or raw material.
SAIL has the iron ore security. Will you give RINL an iron ore mine?
I have asked RINL to take part in mines’ auctions to ensure that it gets one within the shortest possible distance from its plant. It is looking at a mine in Odisha. However, I won’t recommend the mines ministry to give any special status to it.
Will you consider setting up a regulator for the steel sector?
The steel sector was made totally deregulated since 1992. Intervention of such type has never been done after that. Steel price is market-driven. No question of setting up a regulator now.
Is the 300 MT steel capacity target too ambitious?
Where there is a demand, production is not a problem. When we talk of 300 MT, actual production will be 240 to 260 MT. We have set a 160 kg per capita consumption target from 64 kg now. We should also be able to export to our neighbouring countries, gulf nations and the entire African region. The need for steel in our country is also tremendous. We have been able to create only 25% of the infrastructure that we need to create. Another 75% is needed to be done. Indian industry must understand if it wants to capture markets that are emerging, then it has to improve capacity and quality of its steel.
But, demand is not picking up?
Steel consumption grew by around 5.328% for the last few years. For the last three years, the construction sector has not been doing well. It is not anybody’s fault — the market was so artificial. However, time is near when it comes back to its original shape.
How do you see the industry two years down the line?
In the next two years, I want the secondary steel industry, which contributes 57% of the total steel, to be efficient enough to compete with integrated steel producers on quality. The second thing that I want is a double-digit (8-10%) growth in production, consumption and exports.