SAIL Plans Rs 25,000-crore Investment To Hike Capacity

Mumbai, July 26 | Updated: Jul 28 2004, 05:07am hrs
Steel Authority of India (SAIL) has chalked out an ambitious expansion plan involving a phased investment of Rs 25,000 crore, spread over eight years.

SAIL chairman VS Jain told presspersons in Mumbai that the company would ramp up its steel-making capacity from the current 11.83 MT in 2003-04 to 18.7 MTPA by 2012.

The expansion plan is based on an anticipated gross domestic product (GDP) growth of 6.5 per cent to seven per cent, which should see domestic steel demand soaring to around 60 mt from the current 28 mt, the SAIL chairman noted.

The expansion plan will be financed mainly through internal accruals. Resources of Rs 2,500 crore to Rs 3,000 crore should be easily available, Mr Jain said, adding that it would turn to debt finance for funding its growth plans, while adhering to the companys policy decision of sticking to a 1:1 debt-equity ratio. Currently, the company has around Rs 7,000 crore in debts after paying off Rs 1,000 crore debt during the current year.

The company is constantly improving its product mix. It hopes to bring down the share of semis from the current 22 per cent to five per cent by 2012 and shift 100 per cent of its production through the continuous casting process.

While the domestic market, where it sells 92 per cent of its products, will continue to be the companys focus, the chairman noted that the company would continue to service the export market it currently operates. SAIL exported its products to 18 countries during the last fiscal.

Iron ore and coking coal are the two key inputs where the company is facing difficulties. To tide over the problem, the company is seeking long-term alliances for its coal requirements. It has approached the governments of Jharkhand and Chattisgarh for its iron ore requirements.