SAIL plans capex of Rs 40,000 cr, to increase capacity by 10%

New Delhi, June 5 (UNI) Bolstered by strong demand, the state-controlled Steel Authority of India Ltd (SAIL) has planned a capex of Rs 40,000 crore over the next four-five years and plans to increase the current capacity of 13 million tonnes by 10 per cent.

''We have planned a capex of Rs 40,000 crore for the next 4-5 years and during this period we will be focusing on modernisation and expansion,'' SAIL Chairman S K Rungta told a TV channel.

There is a need to raise debt to fund capital expenditure, Mr Rungta said, adding that the company is aiming to maintain a debt equity ratio of 1:1.

Commenting on Tata's and Mittal's global acquistions, Mr Rungta said, ''We are not ruling out global acquisitions. We are open to global buyout, if there are better opportunities''.

The demand of steel is growing at 12-13 per cent domestically and the company is taking all possible steps to meet the demand.

In this direction, SAIL is also in talks with foreign coal mining companies to meet the ever-increasing demand of steel, Mr Rungta added.

''The prices of value-added products is expected to rise to 40 per cent post-expansion,'' Mr Rungta said adding there is also possibility of small price correction in some products.

However, he cautioned there was not much room for a rise in steel prices. ''Steel prices are at a firmed up level, I don't see much scope for a further increase,'' he said.

The company registered a 72 per cent jump in net profit to Rs 1,902 crore in the fourth quarter ended March 2007, compared with Rs 1,103 crore in the corresponding period of previous year.

Its revenues increased by 14 per cent to Rs 11,534 crore in the quarter from Rs 10,102 crore in the year-ago period while the revenues reported a growth of 17 per cent to Rs 9,984 crore from Rs 8,774 crore in the same period of the last year.

In the full year 2006-07, the company recorded a 55 per cent increase in net profit at Rs 6,202 crore.

During the period, the company achieved a record annual turnover of Rs 39,189 crore, an increase of 21 per cent over Rs 32,280 crore in the previous financial year.

UNI