ISA hot on Bhushan Steel, offers a berth

The Indian Steel Alliance (ISA), an alliance of five major hot-rolled (HRC) coil producers, has made overtures to leading cold-rolled producer Bhushan Steel to become its member as it was diversifying into HRCs with a plant in Orissa of over 1 million tonne.

The development comes against the backdrop of a plan by six industry associations, representing about 1,000 downstream steel firms, to join hands this month to lobby jointly with the government and HRC producers against rising prices.

The six associations are Cold Rolled Steel Manufacturers Association of India, All India Rerollers Association, All India Induction Furnace Association, Steel Rolling Mills Association of India, Sponge Iron Manufacturers Association and Ship Breakers Association of India.

Bhushan Steel has, however, indicated that it would not be able to become an ISA member for another 4-5 years. Managing director Arvind Singhal told Business Standard that he will take a call on ISA's offer only after the proposed plant at orissa was completed.

"The construction will start in 2005 and take another 3-4 years to complete," he said adding that till then, Bhushan Steel would remain a member of the Cold Rolled Steel Manufacturers Association (Corsma).

It is worth noting that Corsma and ISA have been at loggerheads during the last year over rising HRC prices. While Corsma has been lobbying hard to bring down the customs duty on HRC, the same is being resisted by ISA.

In a separate initiative, ISA has also asked Corsma to become members of the Indian Cold Rolled Steel Association (Icross), a new body set up under ISA's ageis. But Corsma has turned down the proposal, according to sources close to the developments.

The offer to Bhushan Steel followed ISA's decision to include steel companies producing at least 1 million tonne of HRC annually as its members in a bid to expand its membership.

This would also enable Rashtriya Ispat Nigam Ltd to become an ISA member. The present members of ISA are SAIL, Tata Steel, Jindal Vijaynagar Steel , Essar Steel and Ispat Industries Ltd.