Steel Authority of India (SAIL) has largely overcome the Covid-19 crisis, posting a healthful profit in the third quarter. In her initially-ever interview due to the fact she assumed charge as chairman on January 1 this year, Soma Mondal speaks to Surya Sarathi Ray about the steel industry’s prospects in the close to term and the company’s program to decrease its debt additional. Edited excerpts:
SAIL performed properly in the December quarter of the ongoing fiscal. What’s in retailer from you in the final quarter and the 2021-22 fiscal?
The begin of the present economic year saw us battling concerns on two fronts. Firstly there was the pandemic which posed a really serious challenge to the life and well-being of our personnel. And then we faced liquidity and profitability concerns though operating operations at our plants at minimum levels. The SAIL loved ones, having said that, stood up to these challenges and came out with flying colours. The fruits of these efforts had been visible as early as June when the lockdown was lifted and the economy revived. The steel sector echoed the sentiments of the all round economy each in terms of demand and provide. In reality, SAIL posted its ideal-ever sale efficiency month right after month and was back in the black in the second quarter outcomes. With the markets regaining momentum in Q3, SAIL posted a net profit of `1,283 crore. The outlook for the sector is really superior. There is a lot of positive sentiment. The uptick in activity in the building, infrastructure and manufacturing sectors augurs properly for the sector in basic and SAIL in distinct.
What share of the steel market place do you take pleasure in at present and how do you see that increasing in the close to future?
Out of the total steel produced in the nation, about 60% comes from principal producers and the remaining 40% is contributed by the secondary sector. The principal sector has various steel players in addition to SAIL and these have progressively added capacity, growing their market place share more than the years. Despite operating in a very competitive market place for a extended time, SAIL has maintained its position amongst the top rated steel businesses in the nation. The organization has continually evolved itself to respond to market place specifications and expanded its item basket. SAIL will continue to traverse that path to preserve its position in the future.
What will be your concentrate places in the upcoming fiscal? Do you program to embark on the programme to expand capacity to 50 MTPA as was projected earlier?
The present economic year has been really difficult. Despite the improvement in market place situations in its latter aspect, the volumes will be decrease on a year-to-year basis. As far as 2021-22 is concerned, we will concentrate on consolidating all round volumes and growing the share of completed and worth-added steel in our portfolio. That must assistance us do improved in each physical and economic terms. As for capacity expansion, the organization has a extended-term program to boost capacity to 50 MTPA, in maintaining with the National Steel Policy 2017. While we will be moving in that path progressively, we are equally focused on reaching out to prospects by means of stronger promoting initiatives. We had launched branded structurals referred to as NEX and branded TMT bars referred to as SAIL SeQR and these have got established as the ideal in class in the market place.
Coking coal, a essential raw material for the steel sector, is nonetheless largely missing from SAIL’s portfolio. Any plans to obtain a mine overseas?
Most of our coking coal specifications are met by means of imports. SAIL has a joint venture named International Coal Ventures (ICVL) with a couple of other PSUs, which aims to obtain mining assets abroad. ICVL has currently acquired coal mines and assets at Benga and Zambezia in Mozambique with met coal reserves (ROM) of more than 700 MT. Another 6,000 MT of unexplored sources (ROM) are anticipated to be offered at Tete. While supplies from these sources have commenced, the mining operations at these assets will progressively be enhanced.
Is there any program to companion with a foreign player to make auto-grade steel in the nation?
The technologies for producing auto-grade steel is offered with a lot of steel businesses and SAIL is exploring distinctive alternatives. Delegations of Indian steel PSUs led by the steel ministry have visited nations like Japan and South Korea and deliberated with steel businesses there more than expansion and technological collaboration to manufacture higher-grade steel, like auto-body sheets, in India.
How do you program to deleverage your balance sheet? What is the debt level now and to what extent will you pare it by the finish of 2021-22?
We borrow as per our enterprise specifications. And we move to reduce debt based on the company’s position and the enterprise situation. Apart from greater money collections due to improved steel sales, the organization is augmenting money flows by means of auctions of iron ore and fines. As aspect of deleveraging, we have also adopted a mix of other measures like debtors’ management, monetising of idle assets and sale of by-goods. At the finish of the third quarter of the present economic year, SAIL’s debt stood at about `46,610 crore (IND AS), which is a reduction of pretty much `7,000 crore from its peak level of about `52,000 crore in April 2020. The organization plans to bring it down additional in the present quarter and the next economic year.
It appears purchasers are not interested in your 3 particular steel plants. Is there a program B in spot?
The government had earlier authorized the ‘in-principle’ strategic disinvestment of the 3 particular steel plants. The course of action is handled by the Department of Investment and Public Asset Management (DIPAM). As per the guidelines for disinvestment, we are not privy to its specifics.