Raw material crisis may put transformer industry in trouble

The Rs 16,000-crore electrical transformer industry has warned that the sector may be hit due to an expected serious supply gap of a vital raw material called CRGO steel, as its sole domestic producer SAIL is not ready to produce it.

Cold-rolled grain-oriented laminated silicon steel or CRGO steel used by the electrical transformer industry used to be made by Steel Authority of India (SAIL).

"However, not only did the state-run steel firm stop production of this vital raw material, but is also opposed to resume production. We believe this is being done at the behest of those, who control its imports," a spokesperson for the Indian Transformer Manufacturers' Association (ITMA) told PTI here today.

He also pointed out that the Tatas-owned Corus, based in Britain, is the only other domestic company that has the technology to manufacture CRGO steel.

"But Corus, too, does not seem to be keen to do so, even though the country consumes around 20 per cent of global CRGO steel. Several representations made by us to the Union Steel Ministry have not helped," added the ITMA spokesperson.

When contacted, SAIL Chairman and Managing Director C S Verma told PTI that his company is exploring a tie-up with a foreign company to manufacture CRGO steel.

"We are in tie-up talks with a foreign company to manufacture CRGO steel. But at the moment, I am not at liberty to name the company. We used to make CRGO steel 30 years ago, but we could not succeed in stabilising our production. So, we had to discontinue it. So far, nobody has mastered this technology here," Verma explained.

A Tata Steel spokesperson refused to comment saying it is not immediately possible for them to comment on this.

The electrical transmission and distribution industry is fully dependent on electrical transformers to supply power, but it does not seem to be aware of the problems of the transformer industry, electrical transformer industry, sources said