S K Roongta, chairman, Sail who was in Bangalore over the last weekend said "we have healthy reserves on our balance sheet on which we will raise debt as we roll out the expansion." This expansion will be spread over the four Sail plants at Rourkela, Bhilai, Durgapur and Bokaro.
The company is taking up the expansion at a time when coking coal prices have shot up three times to $300 per tonne during the past one year. "We are cranking up our efficiencies and increasing the focus on value added products to fend off this price increase," said Roongta.
Currently close to 40 per cent of Sail's Rs 35,000 crore revenue comes from value added products. Roongta further added that processes have been put in place to enable the company to churn out an additional million tonne of steel based purely on efficiency improvements.
Sail is also widening its net to secure coal and iron ore reserves in an effort to keep the blast furnaces in full steam after the expansions and maintain healthy margins. "We have formed a joint venture with Tata Steel for coal mining in Jharkhand while we are actively trying to start iron ore mining at the Chiria mines in the same state," Roongta said.
This iron ore mines has high grade iron ore deposits of about 2 billion tonnes. "Mining at a part of the Chiria complex is already underway and there are some issues with the rest. We hope to resolve the pending issues in the near future," he noted.
