BS reported that major steel companies in India have indicated that more than 32% capacity will be added to the current 63 million tonnes at a cost of around INR 72,000 crore.
Of this, most of the addition will be in flat steel, used in the automobile and white goods sectors, while long products used in the construction sector will account for about 30%.
The addition may be far short of the steel ministry’s projections of 124 million tonne by 2011-12, but at least it’s not going to be hit by land hurdles or want of funds. The projects have already achieved financial closure.
Missing the capacity target, though, could be a blessing in disguise for a sector which is yet to recover from the slowdown.
Per capita consumption in India is 46 kilograms, compared to a world average of 200 kilograms. However, the government has set an ambitious target of becoming the second-largest steel producer in the world. That’s based on the memoranda of understanding that have been signed.
Around 222 MoUs have been signed to create capacity of 276 million tonne steel. Of course, to realize that capacity would require key resources: land and mines. Small wonder that the industry is nonchalant about the quantum of steel that is going to flow into the market. The milestone is still a long way off.