Govt plans strategic disinvestment of Salem Steel Plant

Iron & Steel | Imports from China, 2019: 4 percent. (Image: Moneycontrol)

The government is planning strategic disinvestment of the Salem steel plant (SSP) in Tamil Nadu and not total disinvestment, the Lok Sabha was informed today.

Steel Minister Chaudhary Birender Singh said the financial reports of the SSP in the last few years showed a "dismal" picture of the once most-reputed steel plant in the country.

"There is a proposal for strategic disinvestment of the Salem steel plant, not total disinvestment," he said during Question Hour.

The minister said legal advisors and surveyors have been deployed to make a detailed analysis of the plant and a decision on the future of the plant would be taken after receiving their reports.

Singh said the plant, which produced 3.39 lakh metric tonnes per annum of steel, was considered to be the country's best plant producing stainless steel.

The minister said it has come to light that the plant's 46 per cent loss has happened due to high power tariff and the Tamil Nadu government has been requested to provide power at reasonable rates.

Replying to another question, Singh said India has a crude steel capacity of 126 million tonnes as on March 2017.

"The national steel policy 2017 envisages enhancing the domestic crude steel capacity to 300 million tonnes by 2030- 31," he said.

The minister said the crude steel capacity added 2007-08 to 2016-17 was 66.49 million tonnes.

During this period, domestic finished steel consumption grew by six per cent compounded annual growth rate and hence the reason for the financial health of the steel sector cannot be attributed to stagnant steel demand.

However, the financials of steel companies were adversely affected due to significant price fall of steel commodities and increase in imports of total finished steel (71 per cent) during 2014-15, he said.