Bullish on the domestic demand, Rashtriya Ispat Nigam Ltd (RINL) is doubling its liquid steel manufacturing capacity to 6.3 million tonne per annum (mtpa) with an investment of Rs. 12,000 crore. The PSU is also planning further expansion to raise its manufacturing capacity to 11 mtpa in the next ten years. In an interview, RINL chairman PK Bishnoi said the company is in the process of tying up Rs. 70,000 crore to finance its expansion programme. Excerpts:
How is the company’s capacity expansion projects progressing?

We plan to complete the capacity expansion to 6.3 million tonne per annum (mtpa) of liquid steel by the end of the current financial year. We are using cutting edge technologies in our expansion projects that would help improve the image of the company as a quality steel producer. Besides, the upcoming projects will set new benchmarks for the Indian steel industry in respect of technical parameters such as specific energy consumption, specific water consumption and blast furnace productivity. Our market leadership position would also get a boost.

What is the industry trend in terms of demand, pricing and volume?

In , there is no dearth of demand, save for temporary aberrations. and were the only countries in the world to have registered positive growth in production in 2009. According to World Steel Dynamics, is the best place in the world to set up a steel plant. Booming economy and low per capita consumption of steel would ensure sustained demand for steel in in many years to come. However, prices are bound to fluctuate with international prices. It would also depend on the prices of key raw materials like iron ore and coal.

With economies abroad recovering slowly, steel buyers the world over have started to build up stocks. The rise in raw material price cost pushed up steel prices in the last quarter of 2009-10. However, the fast changing demand-supply equations, together with the uncertainties in the euro zone, have acted to deflate the market and led to huge price fluctuations, globally. The fluctuations are bound to continue till the global economies recover fully and reach stability.

What are your basic strategies to improve availability of raw materials for your plants?

For a steel company like RINL, which is dependent on external sources for both iron ore and coking coal, these are testing times.

The prices of iron ore and coking coal are increasing every quarter. The prices declared by NMDC for the second quarter of 2010-11 are 70% higher than the record prices that prevailed during the first half of 2008.

On the other hand, steel prices are 33% lower than the record prices that prevailed during the first half of 2008. Still RINL has to bear an additional burden of about Rs. 10,000 per tonne on saleable steel production, compared to steel plants with captive iron ore and coking coal mines.

To overcome this handicap, RINL has applied for mine allocation and is also pursuing joint ventures with various state mineral development corporations for value addition projects in the respective states. This is, in addition, to our efforts for acquisition of coking coal mines abroad through ICVL.

We are in talks with NMDC for iron ore supply and also trying to rope in it as a JV partner to set up a 10 mtpa plant on land and infrastructure available at Visakhapatnam.

Do you plan to sharpen your focus on the export market?

offers a very good market potential for steel. Therefore, our primary focus is to meet Indian demands. However, need-based exports are also being undertaken. Our products are well accepted in export markets. We are constantly on the look-out for adoption of new technologies.

How is RINL managing environmental challenges?

We had carried out massive afforestation during the commissioning of the 3.0 mt stage under the drive “three million trees for three million tonne capacity.” The area covered accounts for 41% of the total acquired land. We have now charted out an annual plan for increasing the green cover in tandem with the expansion plan of the company. Our water consumption is the lowest in steel industry and our specific energy consumption is one of the lowest. With latest technologies being adopted in expansion, these parameters would improve further and reduce greenhouse gas emissions.

We have made the best use of waste gas heat from our 40 MW captive power plant. This capacity is being augmented by another 50 MW to 90 MW capacity level to utilise waste gases from expansion units. Such level of power generation from waste heat is perhaps the best in the country.