Impact of global slowdown ‘marginal’, says SAIL chief

HYDERABAD, June 19, 2012



Steel Authority of India Limited (SAIL) has asserted that the impact of the prevailing global economic uncertainty on the company's operations was marginal and the company was gearing up for an incremental capacity addition of 15 million tonnes during the current fiscal.



"We cannot claim that we are insulated from the global economic developments. But the impact will be marginal," SAIL Chairman C. S. Verma, who was given additional charge as the chairman of NMDC, said.



Insulated by demand



While the robust fundamentals helped it insulate from the global developments to a large extent, growth was ensured as the country was a demand centre.



Per capita consumption of steel, for instance, was 55 kg a year in urban areas and 15 per cent in rural areas against the global average of 200 kg. This would continue to drive the market in the coming days.



Giving comfort to the sector was the huge allocation, of the order of $1 trillion, made for infrastructure in the XII Plan. The current capacity, estimated at 80 million tonnes, is planned to be enhanced to 150 million tonnes by the end of the XII Plan, 2016-17, to meet the emerging demand.



"Other economies are either saturated or overheated. This is not the case with us," he told The Hindu. Replying to queries, he said there were no constraints as far as availability of iron, the prime raw material, was concerned, while several steel majors were dependent on import of another ingredient, coking coal.



On the plans for NMDC, he said the public sector company had aggressive plans for overseas operations and set aside Rs.1,200 crore for acquisitions. "The capital expenditure for the current year is over Rs.4,500 crore, and we will not leave any good deal that comes up," he said.



NMDC was conducting the due diligence process relating to some proposals, he said while declining to divulge the details of the projects.
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