Imperative to set up steel-making machinery facility: SAIL

NEW DELHI: Indigenous steel-making equipment will reduce the cost of projects, but there is not even a single such unit in India now even as the country is planning massive steel capacity addition at a mammoth investment of USD 120 billion by 2020, SAIL chief C S Verma said today.

"As we will be adding 120 MT capacity by 2020, it would require USD 120 billion investment, including USD 72 billion on plant and machinery. But not even a single manufacturing facility to make machinery for steel-making is here. We need to have some," Steel Authority of India (SAIL) Chairman C S Verma told PTI.

India in 2011 had produced around 72 million tonnes steel against the installed capacity of 80 million tonnes per annum (mtpa). The country envisages to raise the capacity to 200 mtpa by 2020.

According to industry thumb-rule, investment to the tune of USD one billion is required for every one million tonne incremental steel capacity addition. Plant and machinery comprises over 60 per cent of the total investment needed.

"We don't have equipment. Almost all that is required in an integrated steel plant is being imported. Had there been a manufacturing base in the country, the cost of projects would have come down and we would have the advantage of procuring machinery from indigenous sources," Verma said.

Meanwhile, when asked if the government was planning to address the machinery issue, Steel Secretary D R S Cahudhary said efforts are being made to reopen the Ranchi-based Heavy Engineering Corporation (HEC).

HEC was manufacturing machinery for steel-making, but it went out of business because it was not getting adequate orders from the steel sector.

"So, we have the technology, we have the capability and if economic works out right, we can make it. I presume the heavy industry ministry is taking steps to reopen that," Chaudhary said.