SAIL initiates capex plans, but debt concerns loom
Who: Public Sector Undertaking (PSU) steel major SAIL
What: Initiating a ₹100,000-crore expansion and modernization plan to raise capacity to 35 million tonnes per annum by 2030-31
When: The expansion plan is expected to be completed by 2030-31
Where: The expansion is planned for multiple production plants, including IISCO Steel Plant in West Bengal, Bokaro steel plant, and the Durgapur Steel Plant in West Bengal
Why: To increase capacity and modernize infrastructure in order to produce higher grade steel products for various industries, including oil and gas and automotive components
The state-owned steel maker, SAIL, has set out on a massive expansion and modernization plan with the goal of increasing its capacity to 35 million tonnes per annum by 2030-31. The company’s current capacity stands at around 20 million tonnes per annum, with a capacity utilization of 95 percent. The board has approved a greenfield expansion plan for the IISCO Steel Plant in West Bengal, with the aim of increasing capacity to 4 million tonnes per annum.
Additionally, plans are in place for expansion at the Bokaro steel plant, with pre-feasibility report studies already completed. The Durgapur Steel Plant in West Bengal is also set for brownfield expansion and modernization, with the addition of a new TMT mill of 1.4 million tonnes per annum.
While these expansion plans are underway, concerns about the company’s debt are looming. SAIL’s Executive Director, Praveen Nigam, stated that efforts are being made to bring down the current debt of ₹30,000 crore, but significant reduction is not expected in the immediate future.
Despite challenges such as volatile steel prices and increased coking coal import costs, SAIL remains hopeful about improved realizations in the coming months. The company also anticipates resolution of some of the volatility in coking coal import prices when its Tasra coal mines become operational next fiscal.
SAIL’s ambitious expansion and modernization plans, coupled with efforts to reduce debt, signify a pivotal moment for the company as it strives to enhance its production capabilities while managing financial concerns.
