India's largest steel maker Steel Authority of India (SAIL) plans to invest a whopping Rs 1.31 lakh crore to expand its production capacity to 45 million tonnes per annum (mtpa) by 2020, its Chairman CS Verma said.
The state-owned steel maker is in the midst of expanding its crude steel production capacity to 21.40 mtpa from 12.84 mtpa now with Rs 72,000 crore investment. On top of this, it plans to invest Rs 131,000 crore to raise capacity from 21.4 mtpa to 45 mtpa.
Verma said the planned expansion was to meet the nation's rising steel consumption, which was way below the world average.
"A Board-level committee is deliberating on increasing the steel-making capacity to 45 mtpa by 2020. We will increase capacity through both greenfield and brownfield expansions. It roughly takes $1 billion investment for one million tonne steel capacity addition," SAIL Chairman CS Verma said in an interview.
SAIL, which operates five integrated steel plants, plans to expand capacity at four of them, leaving IISCO Steel plant at Burnpur out of the expansion purview.
Capacity is proposed to be expanded the maximum in Bokaro Steel Plant to 16.75 mtpa from 4.62 mtpa following the ongoing expansions. The Durgapur facility's capacity would be added to 8.8 mtpa from 2.2 mtpa. Three mtpa capacity would be raised in both Durgapur and Rourkela steel plants.
"We will start work on increasing capacity to 45 mtpa as soon as the current phase of expansions is over next year," he Verma, adding funding and other details would be chalked out once the Board gave its go-ahead.
The greenfield plant may come up at Sindri in Jharkhand at the site of erstwhile Fretiliser Corporation of India. The Chairman, however, did not take this proposed 5.6 mtpa plant into consideration as he gave details of the expansions to take the company's crude steel making capacity to 45 mtpa.
SAIL has already received Cabinet approval to set up the greenfield steel plant with about Rs 26,000 crore investment.
India currently ranks as the fourth largest steel maker in the world with around 80 mtpa installed capacity, which is likely to go up to 150 mtpa by 2020 with investments from both public and private sectors.
The potential of steel demand in the country is huge as per capita consumption of steel here at 57 kgs lags far behind the world average of 214.7 kg and China's average of 459.8 kg. The average is worse when compared with other Asian peers such as Japan and South Korea at 506.7 kg and 1,156.6 kg, respectively.
