SAIL chalks out Rs 35,000 cr spread plan

Unperturbed by the spate of mega investment announcements by domestic and foreign steel companies including Tatas, Posco and Mittals, steel giant Steel Authority of India Ltd today said it would maintain its leadership position in India while scaling up its investment to Rs 35,000 crore in the next seven years.

"If we are not making any announcement, it does not mean we don't have plans and the wherewithal. We will continue to maintain our leadership position," SAIL chairman V S Jain said while listing out many features that would keep the corporation ahead of its competitors.

The public sector steel major, which had come up with expansion plan to the tune of Rs 25,000 crore by 2012, would now pump in additional Rs 10,000 crore for value added products and expansion of Indian Iron and Steel Company (IISCO), which it is set to acquire in 2-3 months.

"We have very precise plans with time-bound targets and attainable goals," he said.

Sounding sceptical about the recent announcement of mega projects, Jain said "if we go by the announcements there would be production of about 100 million tonne of steel in the country. Where are the resources for this scale? "Let's see how many of these projects actually fructify," he added.

Seeking imposition of penalty clause for those failing to fulfill their commitments, SAIL chief said, "these companies have been given iron ore reserves. We should not just give away them without any progress in the direction of steel making. Award of ore reserves should be linked with these promises turning into reality."

He said the PSU had clear cut advantage over its competitors in terms of infrastructural, human and technical resources, marketing network and strong financial position.

"We can augment our capacity at half the price of what our competitors would have to invest," he said adding that the Bokaro Steel Plant alone was built with keeping in mind that it could be expanded to 10 mt capacity whereas with the technology available now it can be easily be expanded to 15 mt from the existing four million tonne.

"We can expand our capacity to 35-40 million tonne easily by merely by de-bottlenecking the existing plants. No private sector company is in a position to match our infrastructure,'' he said.

Jain said with a manpower strength of 1,20,000 and high-end technical expertise in the field and a cash reserve of Rs 6,000 crore besides being a virtually a debt-free entity, SAIL is in an enviable position to finance its expansion and other projects.

"I don't think the private sector can match our network with stockyard in almost every state," he said, SAIL had allocated Rs 2,000 crore for producing speciality steel.