SAIL targets 20% increase in production and sales this year.

KOLKATA: Steel Authority of India (SAIL) is targeting a 20% increase in production and sales this year with new mills in its five steel plants adding to overall capacity, even as the company's variable cost of production has come down by 10% in the first quarter this year. SAIL is also adding a fresh capacity of three million at Rourkela Steel Plant by 2018 to produce the key material for its proposed automotive steel joint venture with the world's top steel producer, ArcelorMittal.

"Ramp up of production from our new units is increasing quantum of production and leading o better quality of products. It has also helped reduce variable cost of production by 10% in Q4 FY16 compared to Q1 of FY16 and the same trend continues," P K Singh chairman SAIL said. The company is also taking up new projects to enhance its product mix and profitability, besides the modernization programme which is nearing completion, Singh added. This includes installation of a new three million tonne capacity hot strip mill at Rourkela which will make plates of 2250 mm width. The latter is scheduled to be commissioned in 2018 and will help SAIL product high quality hot rolled coils including high strength grades to cater to the domestic automotive industry, he said, addressing the company's 44th annual general meeting. Industry watchers pointed out this upcoming mill is slated to provide the key material --- hot rolled coils --for SAIL's proposed joint venture with ArcelorMittal for automotive steels.

The SAIL chief justified the higher production volumes in a otherwise lacklustre steel market by adding that India is expected to see a more than 5% demand growth in both 2016 and 2017, according to a World Steel Association forecast. In 2015-16 India was the only major steel consuming market to buck the global trend and post a growth. However, the country needs to take protracted trade measures to counter the global oversupply that is likely to persist in the near future. India has already taken a slew of corrective trade measures like Minimum Import Price (MIP) or anti dumping duty for hot and cold rolled coils over the past year to counter cheap imports and these steps have eased the pressure on domestic steel companies, including state run SAIL.

To beat the challenges of an indifferent steel market, SAIL is taking "conscious steps to improve customer centric processes for better sales and performance," Singh said. In particular the company is focusing on marketing in regions where it has natural freight advantage, increasing retail sales and leveraging SAIL's brand image. On an internal level, the company is reaching out to every employee, sensitizing and informing them about these new initiatives and strategies for adopting a customer-oriented culture.

Source : economictimes.indiatimes.com