New Delhi : The stagnant demand scenario of the Indian steel sector is likely to come to an end with the new government putting thrust on areas like manufacturing and infrastructure, SAIL Chairman C S Verma said on Wednesday.
Addressing shareholders at the company’s annual general meeting (AGM), Verma said, “We witnessed another year of sub 5 per cent GDP growth in fiscal 2013-14. However, a new era of hope, change and confidence has dawned on the country.” The signs of change to come were already reflected in the General Budget presented by new government with announcement of initiatives such as opening up of more sectors for Foreign Direct Investment, plans to accelerate growth in manufacturing and facilitating investments.
Besides, the government has its focus on infrastructure like development of smart cities, ports, power plants, plan for doubling the pipeline grid, metro for tier-II cities, industrial corridors, incentives for housing and revival of Special Economic Zones. “These initiatives augur very well for the Indian steel industry, and we are confident that good growth would be witnessed in domestic steel consumption in the coming years, bringing an end to the stagnant demand scenario,” Verma said.
India’s steel consumption grew by just 0.6 per cent last fiscal, its lowest in four years, to 73.93 MT, mainly impacted by a slower expansion of domestic economy.
This was due to subdued demand from two major consuming sectors – construction and automobile. Construction sector accounts for around 60 per cent of the country’s total steel demand and automobile industry consumes 15 per cent. Both the sectors were plagued by slowdown in the economy.
“Notwithstanding the challenging market conditions, your company achieved a total sales volume of 12.09 MT during FY’14 registering a growth of 8.6 per cent over the previous year,” Verma said. On ongoing expansion and modernisation which would take SAIL’s hot metal capacity to 23.4 MTPA, he said orders worth Rs 62,778 crore have been placed and a capital expenditure of Rs 55,444 crore has been made till last month. Facilities of about Rs 26,000 crore have been operationalised. Verma said the company has already made its Vision 2025 ready to increase the company’s capacity further to 50 MTPA.
SAIL, which gets iron ore from captive sources, plans to set up pellet making production capacities with 4 MTPA plant coming up at Gua, 2 MTPA at RSP and BSL each and a one MTPA at Dalli, near Bhilai.