Speaking to CNBC-TV18 Chairmain of Steel Authority Of India PK Singh says that the company is looking to increase its production target. Speaking exclusively to Anshu Sharma, he adds that the steel sector is in a challenging situation for the last 2 years and at the company level also SAIL is facing the challenge of high employee cost.
Speaking to CNBC-TV18 Chairman of Steel Authority Of India PK Singh says that the company is looking to increase its production target. Speaking exclusively to Anshu Sharma, he adds that the steel sector is in a challenging situation for the last 2 years and at the company level also SAIL is facing the challenge of high employee cost.
He said in the last three quarters, there has been a substantial improvement in the production. They have followed a strategy of reducing costs. Admitting that the steel sector has been in a challenging situation in one or two years, there is a global oversupply situation because of China.
Sales used to be 12-13 million tonnes this year, he said, adding that he is targeting about 14 million sales this year.
Below is the verbatim transcript of PK Singh's interview to Anshu Sharma.
Q: What kind of challenges steel sector and SAIL overall is facing in the last two years?
A: In the last three quarters you will find there is a substantial improvement in the production. This production increase, we had a very specific strategy of reducing our cost. We have been successful not only in increasing the productions also we have reduced our cost of production also because in today’s competitive market it is very important that we remain competitive. Despite, almost threefold jump in the international price of coking coal the cost of production -- we have not allowed to increase to that extent of course some impact will always be there.
The steel sector has been in a very challenging situation in the last one or two years where there is a global over supply situation mainly because of China. The government has been very supportive; extending many help to the steel industry and because of that the revival has started.
Q: What is the sales of Steel Authority of India (SIAL) domestically and how much is been exported currently?
A: Our sales used to be around 12-13 million. This year we will cross 14 million tonne sales. However, in the subsequent year there will be quantum jump in the production as well as in the sales. Our exports this year, we are doubling our exports and this trend will continue next year also. We would like to see that at least 10 percent of our production, we should be able to export.
Q: What is the target for capacity addition?
A: The capacity addition in SAIL, most of our projects are complete except Bhilai. We have already completed at Rourkela, Burnpur and Durgapur, all the capacity additions have been done. In the next one year time you will see lot of improvement in the production also and in next few months time our capacity additions will be complete.
Ramping up of phase, we are under going through process of ramping up and this is a challenging time for SAIL. Nevertheless, we are quite confident and quickly you will find that lot of the improvement in the production volumes will come from the newer units.
Q: Are you on your way to meet all your targets that you set out for this financial year and if you could give us a definite number in terms of production in sales target?
A: You will find that our production rise is almost phenomenal. It is more than almost 15 percent rise production in this financial year compared to last year. So, this as per the targets we have taken. Largely, whatever targets we have taken, we are on track. In the next year also we are again going to take challenging target and I am very confident, my entire team is very confident seeing the last one year performance that we are going to achieve that.
Q: NMDC is looking to sell one of its steel plants in Chhattisgarh, would Steel Authority of India would be interested in buying that steel plant?
A: We are going the options and we are obviously interested because we want to increase our capacities. Our plan is today we will be achieving after the recent wave of modernisation is complete and ramping process is complete, we will reach around 21 million tonne of finished steel capacity. Our plan is to achieve 50 million tonne.
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