Tuesday, May 13, 2014

Explore emerging markets, Steel Ministry asks SAIL

GOVERNMENT-owned SAIL (Steel Authority of India Limited) has achieved a seven-percent rise in sales by volume to 12.1 mt in 2013-14, but the foreign market is still unexplored by the steel producer as exports formed just 0.47 mt of its total sales. Keeping this in view, the steel ministry has asked the Maharatna PSU to...
explore emerging markets in Africa, the Middle East and South-East Asia. Over the years, SAIL, that is ranked 1329th in the latest Forbes' Global 2000 powerful companies, was too much focused on domestic market and for this the company was pulled up by the ministry. Now, SAIL is gearing up to boost its exports by building up its portfolio of value-added steel products. SAIL has also partnered with Kobe Steel Ltd, Japan’s third-biggest mill, for technology tie-ups to produce high-value products including special alloy steel, bars and stainless steel tubes that offer higher margins than raw steel products.
A top Steel ministry official has said that Indian steel always has a cost advantage as we have raw material availability. Though, international market is not that lucrative for the steel maker, due to slow economic growth and massive steel capacity expansion under way, SAIL has no option but to plunge into the foreign market.
The overseas thrust could include opening more marketing offices and acquiring or setting up plants abroad.
SAIL’s export portfolio includes wire rods, rails, hot-rolled and cold-rolled coils, stainless steel and billets.
So, it is imperative upon SAIL to gain a foothold in emerging markets and maintain it.
India must take advantage of its geographical advantage in reaching out to East Africa, the Middle East and South-East Asia where freight rates will not be too high.
SAIL’s Rs.72,000 crore modernization and expansion plan across steel plants in Bhilai, Bokaro, Rourkela, Durgapur and Burnpur will ramp up production capacity to 50 mtpa by 2025.
The production capacity is first expected to rise from the current 14 mtpa to 24 mtpa in 2015.
Over the last five years, the company’s production has hovered around 12-13 mt of saleable steel (ingots, semi-finished and finished steel products). In 2014, production of saleable steel was up 4 percent at 12.9 mt. The company produced 5.3 mt of special quality steel in 2013-14 as against 5.02 mt in 2012-13.

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