 "Birender Singh")
Domestic secondary steel producers will have a major role to play as India prepares to build a production capacity of 300 million tonnes by 2030, said Union Steel Minister Chaudhary Birender Singh in an interview with Aditi Divekar. He also discussed about a scrap policy and availability of land for greenfield projects. Edited excerpts:
The target (300 million tonnes) is huge for the current integrated steel players, who are few in number. How do you see the industry as whole, with a not-so-strong global participation?
The industry with a capacity of 300 million tonnes will have three main parts.
First, the secondary producers — who account for 57 per cent of the industry now — will have a big role. In the next three-four years, their share could go up to 60-64 per cent. We shall provide raw material support to them.
The second part comprises global players, who will transfer technology and set up plants here. There are enquiries already from Japan as well as from other firms like Posco.
The third part will have existing domestic integrated players, who already have plans to expand their capacities.
Even today it is difficult to set up greenfield steel plants in India due to land-acquisition issues. How do you expect global players to set up facilities here?
The Land Acquisition Act, 2013, needs several amendments. But currently, there are 85,000 acres available with five-six public sector undertaking (PSUs). Not even 20 per cent of this has been utilised.
So, there is ample scope for global players to set up new plants by buying stakes or partnerships with PSUs. This can happen quickly.
The government’s decision to make 86 per cent products certified by the Bureau of Indian Standards (BIS) has led to car makers threatening to stop production as they import some of these. How does the government plan to tackle this situation?
The BIS certification has already been implemented on 86 per cent of the products. We want BIS certification for all steel products. Having a BIS certification makes steel grades more competitive in the global market and exporting them becomes easier since there is a certain standard.
Some car companies are opposing this because they were importing components from their countries under the FTAs (Free-Trade Agreements). These standards will not allow them to do so despite the FTAs.
The steel sector has one of the largest shares of the non-performing assets (NPAs) of the banking system. How do you perceive this amid the resolution that is taking place now? What is your take on the Ruias bidding for Essar Steel?
The resolution process has worked well for the steel industry. NPAs are disturbing when it came to borrowings, but the situation now is changing.
In case of Bhushan Steel, banks had to take only a 37 per cent haircut. For Essar Steel, the Ruias have quoted the entire amount that is due.
Resolution of these NPAs is a milestone. Steel is a capital-intensive industry. So an asset such as Essar Steel is not something one would like to part with. The Ruias (promoters of Essar Steel) also know that they cannot build this kind of a plant even in the next 10 years.
The steel ministry had plans to set up five scrap units across the country. It has been almost five years and there is hardly any progress on that. What is the reason behind this plan not taking off?
The country needs at least 50-70 recycling or scrap units. At present, there is only one — a joint venture of Mahindra Intertrade and state-run metal scrap-trading firm MSTC.
The steel ministry has now prepared a scrap policy that will be applicable for all kinds of scrap — not just vehicle scrap. We plan to place this policy before the Cabinet for approval.
