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|SAIL Works on ‘Vision 2020’||By A Special Correspondent|
Steel Authority of India Ltd. (SAIL) is a Maharatna Public Sector Undertaking (PSU) under the Ministry of Steel and is one of the biggest steel manufacturers in the country. SAIL is in the process of implementing unprecedented modernisation & expansion programme to enhance its annual hot metal production capacity from present 13.8 million tonnes to about 24 million tonnes by the year 2012-13. For the first time, the company has undertaken modernization & expansion plan at this scale simultaneously at all the plants/units. The growth plan, besides targeting higher production, also addresses the need for eliminating technological obsolescence, achieving higher energy savings, enriching product-mix, reducing pollution, developing mines & collieries, introducing customer centric processes and developing matching infrastructure facilities. Orders for over Rs. 52,000 crores have already been placed under this modernisation & expansion plan.
SAIL has set the ball rolling for the company to work on Vision 2020 for the company. Keeping in line the estimated requirement of steel in the country and the potential SAIL has, action plan is underway for achieving 60 million tonnes production by 2020, which would be approximately 30% of the Indian Steel industry market share.
Towards this direction, SAIL has carried out an assessment of the ultimate potential of our plants at the existing locations. The cumulative production of steel at these locations would range 47- 48 million tones. The remaining 12-13 million tones would be in the form of greenfield investments in the new locations a part of which will be outside India. While stressing upon SAIL’s future plans, scaling up production of steel to such a high level will open a number of opportunities for business diversification. SAIL is contemplating to diversify into areas where synergy exists or which are related to core strength of the company. This diversified portfolio will have an added advantage of de-risking the business from the fluctuations in steel business cycle, besides optimizing opportunities in related business areas. To improve operational efficiency of steel units and to achieve synergy, a number of mergers / acquisitions / strategic alliances / Joint Ventures have taken place. Details of which are under:
Merger & Acquisition (M&A)s
Merger of Maharashtra Elecktosmelt Limited (MEL) with Steel Authority of India Limited (SAIL): Maharashtra Elektrosmelt Ltd (MEL), the 99.12% subsidiary of Maharatna Steel Authority of India Limited (SAIL), has been merged with SAIL. The process of merger of MEL with SAIL culminated with the receipt of the final order from the Ministry of Corporate Affairs in June last year. It has been renamed as “Chandrapur Ferro-Alloys Plant”.
Transfer of Salem Refractory Unit of Burn Standard Company Limited:
The Salem Refractory Unit of Burn Standard Company Limited (BSCL) has been transferred to the newly formed subsidiary of SAIL, namely SAIL Refractory Company Limited (SRCL) in December last year. The process of transfer was initiated on 10th June, 2010, when the Cabinet Committee on Economic Affairs (CCEA) approved the financial restructuring of BSCL, and also authorized the Department of Heavy Industries and Ministry of Steel to work out operational steps for the transfer.
SAIL has formally acquired 50% of the shares of Steel Complex Limited (SCL) in Kozhikode held by the Government of Kerala (GoK) and taken over the operations of SCL. SAIL-SCL Limited, the joint venture company resulting from the acquisition, is working towards the revival of SCL. The JV is in line with the government’s policy of bringing together synergies of PSUs and strengthening them to be competitive in the market.
In order to meet future challenges, SAIL is working on a long-term strategic plan ‘Strategy 2020’, “which will steer the company towards meeting its strategic objectives of achieving profitability through growth and customer satisfaction. Scaling up production of steel to such a high level will open a number of opportunities for business diversification. SAIL is therefore contemplating to diversify into areas where synergy exists or which are related to core strength of the company. This diversified portfolio will have an added advantage of de-risking the business from the fluctuations in steel business cycle, besides optimizing opportunities in related business areas.
Besides, SAIL is making continual efforts for ensuring raw material security and forging alliances with global entities for tapping new markets. In this direction, SAIL-led consortium AFISCO (Afghan Iron & Steel Consortium), which had submitted its bid for mining exploration rights at Hajigak, has won the status of ‘Preferred Bidder’ for blocks B, C and D of the mines with an estimated reserve of 1.28 billion tonnes of high-grade magnetite iron ore (with 62-64% Fe content). For facilitating acquisition of coking coal assets and companies in the mineral-rich countries, International Coal Ventures Private Limited (ICVL) is in the process of identification of coking coal assets and mines which could become a sustainable source of coking coal for the promoter companies.
New strategic initiatives have been taken to augment technological interventions, among which is the newly-launched R&D ‘master plan’ of SAIL aimed at facilitating “acquisition and development of appropriate technologies for sustainable growth”. The other initiatives, related to SAIL’s MoUs with global players such as Kobe Steel of Japan and POSCO of Korea are under progress.
Initiatives in this direction are mentioned below:
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