Visa Steel applies for mining leases in Orissa,Chattisgarh

Steel prices may be falling but that of primary raw materials such as pig iron, coke and coking coal continue to remain stable, said Vishambhar Saran, Chairman, Visa Steel.

Visa Steel produces pig iron and other important raw materials required for steel production. The company expects to receive captive mining leases in Orissa soon and begin production of special and stainless steel.

“We have applied for mining leases in Orissa and Chhattisgarh. But I expect to get the mining lease in Orissa first. We have met our expenditure requirements and now it is up to the Government,” said Saran.

The Visa Steel Chairman added that the company is planning to begin operations at its Kalinganagar plant in Orissa during September-December 2010.

“Once we complete our steel production facilities in Orissa, our annual turnover would be close to Rs 2,750 crore from steel operations, and coke and ferro-chrome sales. This puts us firmly on track to meet our turnover target of Rs 5,000 crore in the next five years,” he said.

SLUGGISH DEMAND

November saw major steelmakers across the country reducing flat product prices by Rs 1,250-1,500 a tonne. According to Mr Saran, in the short term, prices should stabilise close to the current levels.

With the demand for steel in the country continuing to be sluggish, the prices are unlikely to go up in the short term.

Saran, who is also the President of the Indian Chamber of Commerce, added that the low demand scenario would also result in a correction of the Steel Ministry’s target of 124 million tonnes of steel a year by 2012.

“Prices are going down because there is not enough demand. It is a bit unrealistic to expect demand to more than double over the next two-and-a-half years. I think the demand is likely to grow to around 90 million tonnes a year by 2012,” he said.

Mr Saran, however, added that the growth in demand is based on the assumption that demand from the realty sector and the Government (infrastructure projects) picks up by March next year.

“Right now there is a very poor demand from the real estate sector. While the confidence is back in the market, we are yet to see new projects. Only the projects that had been stalled after the economic downturn have started again,” he said.

Taken from Business Line