RINL aims for JV and acquisition for raw material security

Kolkata, Nov 14 (UNI) Rashtriya Ispat Nigam Limited(RINL), the holding company of 3.6 million capacity Visakhapatnam Steel plant, was looking for multiple joint ventures and major acquisitions in home and abroad to ensure raw material sucurity in the coming years.

Talking to newsmen here today, RINL Chairman-cum-Managing Director Y Siva Sagar Rao said uncertainty stared Indian steel industry in the wake of random export of the country's limited reserve of iron ore, the basic raw material for steel sector.

Mr Rao said unlike other major steel producers like SAIL and Tata Steel, RINL did not possess any captive coal or iron ore mine.

In order to protect RINL's future, the Board had decided to follow the route of acquisition and go for joint venture with other steel producing units both within the country and abroad, Mr Rao said.

He said for suitable joint ventures for coal mines RINL was looking for right partners in Australia, Canada, South Africa and Russia, while for iron ore they were looking for acquisition of mines in Brazil, Chile and South Africa among other countries.

Talks in this regard were, however, still in preliminary stages, he claimed.

" However, within the country we are exploring the opportunity for having equity participation with the National Mineral Development Corporation (NMDC), obtaining iron ore mining leases in Orissa and forming a Special Purpose Vehicle(SPV) with SAIL for getting access to its coal mines, " Mr Rao informed.

About his other plans, the RINL CMD said apart from increasing the production target from present 3.6 million ton per annum to 8.5 million ton by 2010-11, they had prepared a blueprint for increasing the annual production capacity further to 16 million ton by 2020 with a proposed investment of Rs 25,000 crore.

The demand for steel in India during the same period (2020) was likely to go up to 180 million ton from the meagre 42 million ton now, Mr Rao stated.

Describing RINL's financial performance during the first six months of the current fiscal as "very encouraging", Mr Rao said speedy decision and dynamic marketing strategies had helped them achieve a sale of Rs 3883 crore, recording over four per cent growth over the corresponding period last year.

Rs 211 crore sale on the export front had recorded an impressive growth of 52 per cent over the corresponding period last year, he said adding all these had helped RINL achieve a provisional gross margin of Rs 1103 crore and provisional cash profit of Rs 1092 crore between April and September this year.

RINL was planning to penetrate into the rural market in a big way, Mr said adding they had undertaken 32 villages in Andhra Pradesh as model steel villeges with most of the houses being rebuilt with steel frames, thereby reducing the overall cost by around 29 per cent.

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