The Hindu : Business : SAIL chalks out Rs. 40,000 cr. plan

Online edition of India's National Newspaper
Wednesday, Sep 12, 2007
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SAIL chalks out Rs. 40,000 cr. plan

Special Correspondent

Internal group to fix output target
Cash accruals to fund 50 per cent

KOLKATA: Even as it fastracks the ongoing brownfield expansion plans which are set to be implemented by 2012, Steel Authority of India Ltd. (SAIL) has begun working on a plan for 2020 to retain its market share, Chairman S. K. Roongta, said.

Talking to the media after an interactive session with the members of the Merchants Chamber of Commerce here, he said one of the main aims of the new corporate plan would be to at least retain SAIL’s current market share of 30 per cent if not increase it. Steel demand is projected to touch 200 million tonnes by 2020.

He said an internal group at SAIL’s R&D outfit at Ranchi was now working on the plan to fix the output target and the investment required for it.

He said following SAIL’s strategic tie-up with Posco, a working group had been set up to identify the areas of synergy. He also said that SAIL was happy at the progress being made by the Korean major on its India plans.

On the financing of the present Rs. 40,000 crore corporate plan for raising output to 26 million tonnes by 2012 from 13 million tonnes in 2006-07, he ruled out a rights issue saying that 50 per cent of the plan would be funded through internal accruals, the remaining through debt.

“We have not decided the instruments now but our Rs. 10,000 crore cash reserve is sufficient to fund the projects which are now at a takeoff stage,” he said.

Earlier, he said by 2014-15 India was likely to emerge as the second largest steel producer after China. On the rising demand for steel in India, Mr. Roongta said Indian infrastructure was at a take-off stage now and there were still many gaps that needed to be filled. “Steel is one of the many critical inputs which is needed to sustain the economy’s nine per cent growth rate,” he said.

He said apart from power costs, SAIL was now globally competitive company according to most parameters. Mr. Roongta also said that a special purpose vehicle was proposed to be launched with other PSUs for acquiring majority stake in coal mines abroad.

MECON had been appointed consultants to study the proposed greenfield project at Jharkhand, he said.

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