SAIL in talks with Japanese, Korean cos to produce CRGO, CRNO

New Delhi (PTI) Steel Authority of India is at
advanced level of talks with 2-3 Japanese and Korean firms to
produce value-added CRGO and CRNO steel, having a total of
over USD 2.5 billion market, entirely met through imports now.
The maharatna company would like to have a technological
partner for the production of the two varieties. However, it
is also open to the options of entering into a joint venture
agreement with the prospective partner to produce the two, C S
Verma, Chairman, SAIL told PTI.
No Indian steel maker has the technology to produce CRGO
steel, which is mainly used in power sector and CRNO, which
finds application in the making of large dia pipes for oil and
gas sectors, now.
Production of these value-added varieties would enable
SAIL to increase its margin and help the consumers get them
at a cheaper rate since they would no longer have to rely on
imports to manufacture transformers and others within India.
Verma said that the current domestic market size for CRGO
products would be USD 1.5-2 billion and the future growth is
linked with the spurt in the power sector.
Similarly, CRNO's rate of growth relies on the expansion
of the oil and gas sector. Domestic CRNO market is currently
pegged at less than USD one billion.
However, it is not just SAIL which is scouting for such
partners for producing these kind of value-added products,
many other domestic players are also looking for forging
similar kind of tie-ups for making CRGO and CRNO steel, Verma
said.
"If you look at the bottomline of Korean and Japanese
firms, their profitability is higher than their Indian peers
though they neither have coking coal nor iron ore deposits,"
Verma said
"On the other hand, all Indian firms have access to iron
ore, still Indian firms profitability is lower than Japanese
and Korean firms. It's because, value-added products are made
very less in India compared to them," he said.
SAIL produces a clutch of value-added products and is in
the processing of bringing out "so many" such products. Out of
its total 12.5 million tonnes production, the state-run firm
produced 4.36 million tonnes of value-added steel.
Verma said SAIL targets to produce over 50 per cent of
the total production as value-added steel by 2012-13 as its
capacity goes up to 24.6 million tonnes. The share is further
likely to go up to around 60 per cent as the company reaches
to 60 million tonne capacity by 2020.