“The company has witnessed a setback in the international
market in terms of demand”, said its Chairman at an interview with NDTV Profit and shared the following:
Has demand tapered off
due to slowdown and how do you see steel pricing heading?
In India, with
the present level of dollar-rupee, inputs have virtually become very negligible.
The price level is more or less stable with no major change expected. There has
been as setback in the demand level. Data from Jan 12 to Apr 12 show increase
in Indian production has been 0.8% of the total steel production in India. If you see roughly
about 24 million ton and global
production is just 0.7%, at 504 million tonne. In Japan, it is 1.4% at 36 mt of
crude steel.
Things are going
to pick up as 12th 5 year Plan has started. Government has approved its committed
infrastructure expenditure, about 10% of GDP, going to be $1 trillion that will
boost demand in all sectors of the Indian economy.
Are
there any delays in Bokaro, IISCO, Durgapur, Bhilai steel plants as lot of flak
was faced recently from the steel minister on delays in executions of new
capacity installation?
The total cost of our modernisation programme is about Rs 72,000
cr which will accelerate our capacity from the present level of 13.82 mt to 23.46
mt of the hot metal. There have been some challenges because we have taken various
schemes in all the plants, simultaneously the expansion and modernization programme
which is in full swing.
Commissioning the
modernisation-expansion scheme in Bokaro has started, like Cocoon battery
number 1 and 2. Reconstruction of blast number 2 is fully operational. Last
scheme of coal rolling mill of 1.2 mt capacity of which the coal trial that we
started, will become fully functional by Oct- Nov 2012.
As far as the Rourkela plant is concerned, A new blast furnace of 460 or cubic
metre is in full swing of installation and commissioning. The first taping of
the hot metal will happen sometime in Oct-Nov 12. Other facilities are at a
very advanced stage and Government has commissioned a new central plant in Rourkela.
The center plant in Banpur with blast one is also ready and we will be getting
billets from Durgapur for the time being to roll it in the Banpur. Two of the
three convertors which are coming up in Banpur should be ready by Dec 12. Blast
one is operational by Dec 12 or by Jan 13. Before the end of this financial
year, one blast in Rourkela and second in Banpur, will start.
Hot metal capacity will go to a level of 19 mt, now at 14mt, by the end of
current financial year 2012-13. There have been some remarks by the steel
minister because his expectation is very high. We are trying to surmount all
the difficulties being faced at the local level.
What
is the status with regards to Hajigak iron ore mine in Afghanistan and your bid
for mining of gold, copper and uranium in Afghanistan in partnership with
Hindustan Copper & NALCO?
Letter of intent for
allocation of 3A iron ore or mining block Hajigak. Negotiation has been issued and
discussions are at a very advance level to finalise and we hope to sign the
joint venture agreement soon. I cannot disclose on other projects. We are still
at the formation level as now the JV agreement among the constitution partner
that understanding agreement is being finalised.
How
about ICVL, as CIL wants to exit ICVL?
We don't have any
communication about Coal India and let us see that ICVL is already in the
process carrying out due diligence of 3 or 4 coal properties abroad. If there
is any such eventuality, we will have to go for the restructuring of ICVL.
What
is the update on meeting called by Government
on concerns over a rise in steel prices?
High input cost resulted in price rise
in Indian and International market. There has to be
a tandem in international market prices, otherwise they are free imports; of
course duty is there. Coal offers are at $200/t. We require about 0.9-10 tonnes
of coking coal to produce 1 tonne of steel. Increase in import prices has to be
passed on to the ultimate consumer.
What
is FY 13production targets and capex going forward?
There has to be a growth of the last year and lets
see how much we can make it further. Capex in the current financial year is
going to be roughly about Rs 12,000 crore.
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