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Competition in Bhilai

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Kunal Bose
Last Updated : Jan 20 2013 | 2:49 AM IST

Looking at the Bhilai steel plant in all its “strength and majesty,” Jawaharlal Nehru had an occasion to describe it as a “symbol of the new India.” Nehru made the remark when he came to Bhilai in October 1960 to commission the plant’s rail and structural mill. In the 51 years since, there has been a metamorphosis of the Indian industry landscape, with many iconic units of the past disappearing. In the space vacated have emerged a number of industries which can take on the best anywhere in the world.

In the steel sector, however, Tata Steel’s century-old Jamshedpur mill and SAIL’s flagship Bhilai plant have gone through periodic renewal, capacity expansion and introduction of value-added products wanted by the market to secure for themselves pride of place. In the making of rails and plates for critical applications, where forbidding quality parameters apply, Bhilai shares space with the world’s leading producers.

If looking for proof, one will find it in Indian Railways (IR) not buying rails from any other unit here or abroad except Bhilai. Of the 22 million tonnes (mt) of rails produced by Bhilai since the commissioning of the mill by Nehru, supplies to IR alone amount to nearly 17 mt. Equally important, it, unfailingly, is receiving repeat orders for rails and plates from many foreign markets which are not easy to make breakthroughs in.

Bhilai CEO Pankaj Gautam says, “Rails are a highly sensitive product and there is no question of the railways here or abroad settling for anything but the best while laying or relaying tracks. IR has no reason to look beyond Bhilai, since the rails we make are identical in quality to the ones used in European countries. Besides enjoying quality approvals of Indian Railways and RITES, our rails have passed the rigorous muster of certification agencies like Lloyds Register and Crown Agents of London.”

Since becoming the chairman of SAIL a year-and-a-half ago, Chandra Sekhar Verma has been working hard to expand the areas of cooperation between the railways and the steelmaker.

This is also finding shape in some joint ventures between the two to make wagons and coaches. Giving shape to “Vision 2020” of the railways will be making a big call on Bhilai. The vision is about augmenting capacity through doubling and quadrupling of lines and segregation of passenger and freight lines on high-density routes, as it proposes addition of 25,000 km of lines by 2020.

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If the target is realised by way of government funding and public private partnerships, it will be a remarkable improvement over the addition of a mere 10,000 km on the rail network between 1947 and 2009, when the vision document was presented in Parliament. The railways want to break away from the orbit of low achievement to one of ambitious growth. As the goal is pursued, Verma is committed to making Bhilai rise to the expectation of the railways.

The expanding rail network, along with a steady rise in the carrying capacity of wagons and coaches running at higher speeds and, thereby, raising the axle load, has challenged Bhilai to make continuous improvements in rail-making facilities. In the development of new and stronger rails, Bhilai, however, enjoys the advantage of following a map given by the railway research organisation, RDSO.

Besides developing corrosion-resistant rails for coastal areas, vanadium micro-alloyed rails for heavy haulage and asymmetric rails, all resulting from in-house R&D work and inputs from RDSO, Bhilai has built competence to make long rails up to 260 metres. Verma wants Bhilai to pursue product-specific R&D with greater diligence to counter any competition in future. In the past, the Ispat group made attempts to spirit away a share of the rails business from the exclusive reserve of Bhilai. But, the second-hand mill it imported could not make quality rails.

JSPL, which owns a three-mt steel mill in Chhattisgarh has, however, started snapping at the heels of Bhilai’s rails business. The market-savvy Gautam is not taking the emerging competition lightly. JSPL claims its 1.25-mt mill incorporates the “latest technology in rolling of rails.” Besides the first mover advantage, Bhilai has its credentials established, something not easy to challenge. Still to contend with the emerging competition from JSPL and, maybe, in future from some others, Bhilai as part of the current capacity expansion and modernisation programme is installing a 1.2-mt universal rail mill. This is a major step forward.

Gautam says the new mill, using the universal rolling method, will make a 130 metre-long rail, also allowing the joining four such units to create one extra-long piece of 520 metres. As rails of this length will make their laying easier and safer for wagons and coaches, Bhilai will see a major fall in the rate of rejection.

The mill, which will cost around Rs 1,200 crore, is being built by a consortium led by SMS Meer of Germany. Very clean, continuously cast metal to be produced at the new steel melting shop will be used by the universal rail mill. Truly, Bhilai remains the face of modern India.

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First Published: Dec 27 2011 | 12:07 AM IST

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