SAIL poised for massive expansion

Steel Authority of India (SAIL), India’s largest steel-maker, is gearing for the biggest expansion drive in its history as it aims to double its capacity to 50 million tonnes by 2025. The expansion is expected to involve an investment of over 2.2 billion USD.

To pursue its ambitious expansion plans, the state- owned enterprise will rely on its nearly 20,000 acres of available land at various steel plants and its 3.5 billion tonnes of iron ore reserves.

The expansion will take place in two phases. In the first phase, the company’s steel-making capacity will be enhanced from the projected 23.5 million tonnes per annum (mtpa) in 2015-2016 to 35 mtpa by 2020. This will be followed by the push to achieve 50 mtpa by 2025-26.

SAIL, India’s largest steel-maker, has the capacity of producing 13.58 mtpa as on March 31, 2014, while TATA steel and JSW follow with 12.17 and 9.15 mtpa respectively. In global terms, SAIL has the 26^th biggest capacity; ArcelorMittal with the capacity of a whopping 96.1 mtpa is ranked at number one.

Some experts argue that the expansion programme also acts as a spur to attract more private investments. In July, the Indian government announced its new plan to raise revenues for SAIL. The government plans to sell 5% stake in its largest steel company, lowering its shareholding in SAIL to 75% from 80%.

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