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State-run Steel Authority of India Ltd (SAIL) wants to catch up with rivals Tata Steel and JSW Steel in steel supplies to automotive and white goods sectors over the next two years. For this, the company expects its current modernisation and expansion drive will help produce the kind of steel used in these sectors.
An estimated Rs 7,039 crore of the modernisation investment of Rs 62,000 crore is being spent on producing value-added products that will be used in the automotive and white goods sector, said Mr C.S. Verma, Chairman, SAIL.
A new cold-rolling complex is being set up at the Bokaro Steel Plant that will boost the share of value-added products targeting auto and white goods sector. The upcoming plant has a production capacity of one million tonnes of cold-rolled steel and 3.5 lakh tonnes of galvanised products, Mr Verma said.
SAIL leads steel industry supplies to segments such as construction, power plant equipment and construction, Railways (including wagon-making), LPG cylinder manufacturing and other capital goods. However, in segments such as automotive, capital goods, oil and gas transport and pre-fabricated structures, SAIL lags its competitors.
In the automotive sector, Tata Steel accounted for 23.6 per cent of the 5.37 million consumed by the segment in 2011-11, closely followed by JSW Steel. SAIL supplied only 1.9 lakh tonnes to the sector with a 3.5 per cent market share.
Similarly, in the white goods segment, SAIL accounted for 4.8 per cent or 1 lakh tonne of the 2.06-million-tonne market in 2010-11. Tata Steel led the steel supplies to white goods segment garnering a market share of 25.4 per cent, followed by JSW Steel and Essar Steel.
Mr Verma said SAIL's value-added product portfolio, consisting of high-grade HR coils and high-strength steel bars, would increase to about 55 per cent of its total output from the present 39 per cent with the completion of the modernisation by 2014. SAIL expects its total output to go up to 24 million tonnes annually from the present 14 million tonnes by 2014.
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