Steel Authority of India Ltd (SAIL) is the largest steel producing company in the country and the 17th largest in the world with a turnover of over Rs 32,000 crore. At present, the company?s market share in the domestic market is about 30% and it plans to grow by 70-75% by the end of this year by mainly improving its capacity utilisation.
Modernisation and expansion plans at its five integrated plants at Burnpur, Bokaro, Bhilai, Durgapur and Rourkela have been approved by the board involving a capital expenditure of about Rs 40,000 crore spread till 2010. By then, its output would increase from 14.5 million tonnes at present to 25 million tonnes.
For the first nine months (April-December) of the financial year 2009-10 the company?s net profit stood at Rs 4,669.5 crore ? almost at par, 0.4% lower than the corresponding period of last year. Profit before tax for the period stood at Rs 7,065.2 crore, lower by 0.7% than the corresponding period of last year. In spite of sales growth by 14% in volume terms during April-December 2009, net turnover at Rs 28,596 crore was lower by about 9% as compared to the same period last year, primarily on account of lower realisations.
SAIL chairman S K Roongta said, ?We remained focused on our fundamentals during the recent downturn and through relentless pursuit by the SAIL collective, significant successes came our way. SAIL is gearing itself up to face the impending challenges relating to inputs and other cost increases, intensifying competition and those relating to raw material security, while making best efforts to seize the immediate opportunities, with increased demand for steel in the country?.
For the quarter ended December 2009 SAIL posted a net profit of Rs 1,675.55 crore, an improvement of 99% over the corresponding period last year. The company also paid an interim dividend at 16% of its paid-up capital, amounting to Rs 660 crore as against 13% interim dividend paid last year.
Under the company?s modernisation and expansion schemes, capital expenditure at Rs 2,793 crore in the December 2009 quarter was nearly 114% higher than Rs 1,306 crore in the same period last year. During April-December of 2009-10, it touched Rs 7,713 crore ?over 138% that of corresponding period last year (Rs 3,231 crore). Modernisation and expansion projects at Salem Steel Plant which involve installation of new steel making facilities and a new cold rolling mill are nearing completion.
The company?s net turnover during the quarter ended December 2009 at Rs 9,697 crore as compared to Rs 8724 crore (year-on-year) has been 11% higher. In volume terms, sales at 2.9 million tonne during the quarter were 24.5% higher than same period of the previous year. The lower growth in turnover as compared to volume growth was primarily due to 12% lower sales realisation during the same period of the previous year.
Apart from lower cost of imported coal and growth in sales, increase in production of value-added steel by 25%, improved techno-economic parameters and several cost efficiency measures, helped doubling of profits.
Bharat Refractories Limited was merged with SAIL in July 2009 and renamed as SAIL Refractory Unit (SRU). Better management of facilities of the unit led to substantial increase of 21% in production during the quarter.
Towards raw material security with respect to iron ore, significant progress has been made during December 2009 quarter. For Rowghat mine at Chhattisgarh, after the statutory clearances, a lease deed agreement was signed on October 21, 2009, an issue which had been pending for more than two decades. This will provide iron ore security to Bhilai Steel Plant for around the next 30 years. Regarding Chiria/Gua mines, during the December 2009 quarter, Jharkhand government recommended the forest clearance proposal of Budhaburu lease, which has a reserve of about 810 million tonne of iron ore.