Low demand, 60-70% production jump in capacity poses challenge: SAIL

The production is growing almost 7-8% but demand is growing by 3%, says Chairman P K Singh

Steel maker SAIL, which has reached the last leg of its Rs 70,000 crore modernisation programme, on Sunday said post modernisation there would be 60-70% jump in production capacity which is a challenge for the PSU as demand for domestic steel remains weak.

Modernisation at the Bhilai Steel Plant (BSP) of India's largest steelmaker was likely to be over in the next few months and with this, the entire process of modernisation will be complete, SAIL Chairman P K Singh said in an exclusive interview to PTI.

"Except Bhilai, modernisation everywhere else is complete," Singh said.

Bhilai Steel plant (BSP) is the largest facility of the state-run steel giant.

"We will be under the process of ramping up our production. Our capacity will also find a 60-70% jump. That is a real challenge for the company. To ramp up, produce, and sell. That is the biggest issue for the company," the chairman said, voicing concerns.

Steel Minister Chaudhary Birender Singh recently inaugurated the new Universal Rail Mill (URM) at SAIL's Bhilai Steel Plant and flagged off the first rake from the new mill, he said.

The Rs 1,200-crore URM will take BSP's total capacity to produce rails at 2 million tonnes per annum (MTPA), which will be the largest rail production capacity in any single location for a plant in the world.

Elaborating, he said that the company had a production growth of 17% in the last calender year and he expects an output growth of 15-17% this year as well.

"This extra production, which is coming particularly when the demand is not growing, there lies the challenge," he said.

The production is growing almost 7-8% but demand is growing by 3%, he said adding the per capita consumption, which is at 61 kg, needs a rapid push.

"We are also driving mass scale campaign where we are meeting various ministries, consumers, various users to increase the steel consumption. We are also getting a lot of help from the government," he said.