Steel Minister asks SAIL to check falling market share

Steel Minister Narendra Singh Tomar today 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", 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, 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, 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," Tomar said in a official statement.

The statement added, "While reviewing the performance of steel major SAIL, 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, 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.
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.