of India (SAIL) chairman S K Roongta says a merger between state-owned companies
SAIL and Rashtriya Ispat Nigam (RINL), for which a proposal is pending with the
central government, would be a win-win situation. Roongta was speaking at an interactive
session organised by the Merchants'' Chamber of Commerce in Kolkata.
Vishakapatnam-based RINL was a port-based plant while SAIL wasn''t, Roongta said,
so there would be synergies in raw material usage, in-house technology and market
access. RINL has a hot metal capacity of 4.15 million tonnes, and makes mostly
long products. It is to be ramped up to 6.50 million tonnes by 2008-09.
SAIL''s ambitious expansion plan, Roongta said the company would achieve a capacity
of 26 million tonnes by 2010, compared with its current capacity of 13.5 million
tonnes. He said India would have a capacity of 200 million tonnes by 2020, of
which SAIL''s market share would be 30 per cent.
Rungta ruled out a rights
issue to fund SAIL''s Rs40,000-crore ($9.9 billion) expansion plan, saying that
the company had a cash surplus of Rs10,000 crore ($2.5 billion); so 50 per cent
of the plan would be funded through internal accruals and the remaining through
debt. Roongta said that SAIL would first take up the modernisation of the IISCO
plant in Burnpur at an investment of Rs10,000 crore.
He said following
SAIL''s strategic tie-up with Posco, a working group had been set up to identify
the areas of synergy. He also said that SAIL was happy at the progress being made
by the Korean major on its India plans.
said that by 2014-15, India was likely to emerge as the second largest steel producer
after China. On the rising demand for steel in India, Roongta said Indian infrastructure
was at a take-off stage now and there were still many gaps that needed to be filled.
"Steel is just one of the many critical inputs needed to sustain the economy''s
nine per cent growth rate," he said.
for power costs, SAIL was now a globally competitive company by most parameters,
Roongta said, adding that SAIL was to launch a special purpose vehicle (SPV) with
other PSUs to acquire a majority stake in coal mines abroad.
had been appointed consultants to study SAIL''s proposed greenfield project in
Jharkhand, he said.