SAIL yes Neelachal Ispat

Steel Authority of India Ltd. is in talks with the central and Orissa governments to take over Neelachal Ispat Nigam Ltd, Chairman V S Jain said Wednesday. The state-owned steel giant has no plans to acquire companies abroad, Jain said.

"We have shown our interest in the plant (Neelachal Ispat)... We have requested the centre and the state (Orissa) government," Jain said at a press conference to announce the company's financial results for 2004-05 (April-March).

Jain said the deal would depend on a fair valuation of the company. The acquisition would be beneficial for Steel Authority as there are several synergies between the two companies which could be maximised, he said.

Jain said the company will introduce voluntary retirement scheme in the next one or two months to reduce its workforce.

"About 2,000 employees are likely to avail of the retirement scheme this year. Overall, the employee strength will come down by 4,000-5,000 as about half of them will superannuate as well," he said.

The steel major also awaits government nod to merge Indian Iron and Steel Company Ltd. with itself. The board of Steel Authority has already cleared the proposal for the merger.

"I am sure this (the IISCO merger) is happening. The government will give a go-ahead for the proposal after examining the issue," Jain said.

Asked whether Steel Authority had any plans to set up a greenfield project or acquire a plant abroad, Jain said, "There is enough scope in India. Many global steel companies are coming to the country. Why should we go abroad when they are coming here?"

Jain said he expected the domestic steel demand to remain buoyant on the back of growth in the manufacturing sector.

"We have drawn a detailed corporate roadmap. According to the roadmap, steel demand will grow at 7 per cent till 2010-2012," he said.

Shares of Steel Authority AIL today traded at Rs 54 on the National Stock Exchange, up 3.45 per cent over Tuesday.