Steel Minister Asks SAIL to Check Falling Market Share

New Delhi: Steel Minister Narendra Singh Tomar on Monday directed SAIL to increase its competitive spirit amidst the steel major's market share dipping to 14 per cent in the last fiscal from 18.8 per cent in 2009-10. Asserting that "capacity without production is meaningless", Mr Tomar asked Steel Authority of India (SAIL) to resolve issues with regard to modernisation and expansion plan at the earliest. The domestic steel giant is implementing a Rs 72,000 crore modernisation and expansion plan to increase capacity to 23.46 million tonnes per annum (mpta) from 14 mpta. Comparing SAIL's performance with its peers with respect to its decreasing sales turnover, Tomar asked the firm to spruce up its competitiveness, an official statement said. "Citing the falling market share of SAIL, from 18.8 per cent in 2009-10 to about 14 per cent in 2014-15, Mr Tomar advised the functional directors and CEOs to ensure better marketing of its enhanced production," it added. While taking stock of annual performance of PSUs under the Ministry, Mr Tomar told SAIL "capacity without production is meaningless" and asked it to resolve all issues pertaining to modernisation at the earliest besides starting production of finished goods from its modernised mills. "For profits to be higher, it is pertinent that techno-economics of production are internationally benchmarked, and the latter can't happen till the capitalisation of all your production units are balanced," Mr Tomar said in an official statement. The statement added, "While reviewing the performance of steel major SAIL, Mr Tomar expressed concern regarding the integrated operationalisation of upstream and downstream production facilities in a time-bound and synchronised manner." Noting that capacity augmentation will lead to enhanced use of raw materials, Mr Tomar directed SAIL management to pay adequate attention to commensurate expansion of its mines, so that the company doesn;t resort to procuring ores from outside market to feed growing production. The statement said the minister consented to take up environmental and forest clearance issues with relevant ministries to help de-bottleneck the raw material security plan for SAIL's current and future plans. "Apprised of the pressure put on Net Sales Realisation (NSR) on account of depressed steel prices, the minister advised SAIL management to increase their share of value added steels, such as production of auto-grade steel," the statement said. Mr Tomar also expressed concern over the rising borrowing of the company to fund its expansion plan, and appreciated company's effort in launching a cost awareness initiative across all its plants and units, the statement said. The minister also took stock of the yearly performance of MSTC Limited and Ferro Scrap Nigam Limited (FSNL) and told officials, "The PSUs of this country uphold our national pride. You are not only expected, but obligated, to perform to your very best and give maximum returns to the national exchequer." The minister was accompanied by Secretary, Steel Rakesh Singh and other senior officials of the Ministry of Steel in the review meetings. MSTC, the only PSU to offer e-commerce facility, updated the Minister on its recent success in conducting e-auction of coal. Mr Tomar asked CMD of MSTC Limited, SK Tripathi, to approach states to help carry out the e-auction of metallic and non-metallic minerals. The statement added Tripathi expressed eagerness to facilitate the process, and sought government's help in convincing other PSUs to utilise the e-commerce platform of MSTC to carry out their trading and procurement activities. MSTC also proposed formation of a joint venture between itself and FSNL, for establishing a ship-breaking yard using the expertise of latter in ship-breaking, and that of former in sale of scrap. Besides, the company also expressed interest in sale of thermal coal, forest, agricultural and rural produce, defence procurement and auto shredding. The total volume of business transacted by MSTC portal increased from 26,883 crore in 2013-14 to Rs 29,924 crore in 2014-15. In its review presentation, FSNL showed interest in exploring business potential in removing overburden at mines, and recovering non-ferrous metallics from slag. Taking note of the construction of toilets by PSUs under the Swachch Vidyalaya Abhiyaan, Tomar also expressed concern over the slow pace of progress, and directed the PSUs to complete the assignment by end of June.

Steel Minister Asks SAIL to Check Falling Market Share

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