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SAIL needs to manage iron ore resources well: Roongta
作者：25 發(fā)布時間：2010-05-31 文字大?。?span id="da">【大】【中】【小】
By Ranjit Bhushan
For the outgoing chairman of SAIL, SK Roongta, the single most significant contribution of his four-year tenure has been the steel PSU’s ability to organise its raw material security, which is central to the company’s expansion plans. “I think, we have made significant progress in raw material security,’’ Roongta told Financial Chronicle, days before his exit as head of the country’s largest steel producing company.
These were issues, which also list high as areas of concern capable of posing a serious challenge for the company. “Raw material security is a concern. Given the high volatility and non-availability of high-grade coking coal, we need to concentrate a great deal on this aspect,’’ he said at the event where SAIL announced results for the quarter ending March 31, 2010.
Asked what he would have ideally liked to achieve, Roongta said while many forward strides had been taken, such as organising the company’s finances, there were areas that need attention. “We have not been able to manage our iron ore resources well,” he said.
Under Roongta’s chairmanship, SAIL had worked out and continued to pursue many joint ventures (JVs) with global majors such as ArcelorMittal, Posco and Indian biggies like Tata. Is the interest of these companies aimed at future disinvestments of SAIL with them preparing to become bidders, should a situation like that arise at a later date, possibly even decades later? “The interest of these companies has nothing to do with disinvestments now or later. These are pure business and commercial decisions, prompted by factors like technology induction and other mutual gains,’’ Roongta said.
According to Roongta, while the JV between SAIL and Posco was at a pretty advanced stage, any agreement with ArcelorMittal and Tatas were very basic and preliminary and “too early to comment on”.
When asked if the Union government’s interjectory policies have led to a price correction of steel. Commenting on the company’s newly acquired Maharatna status, Roongta said that the status accords more powers and autonomy and the company is going to benefit from it, particularly in foreign investments and joint ventures (JVs). “We would have the authority at the SAIL board level itself to conclude JVs, which is a positive development,’’ he said.
Correction of prices in the Indian steel market fluctuates with global trends. “Already some producers have made corrections in prices this month. As you know, prices of long products were at their peak in early April. From that peak, they have come tumbling down by nearly 15 per cent at today’s levels. So this is a process of open markets where prices come up and go down. The market will decide prices,” he said.
Roongta also said that SAIL is open to a price reduction. “In a buoyant market, we increase prices. If the market demands, we should be able to reduce them. We have done it in the past,’’ he added.
Asked about the timing of SAIL’s follow on public offering (FPO), he said there are no deadlines. “There is no exact date for the SAIL FPO. An empowered committee of the government will be constituted. Then a decision would be reached,’’ he said.
In April, SAIL decided to shed 10 per cent government equity in the company. Additionally, it will raise 10 per cent equity, which is to be put through in two tranches. The FPO in both the tranches would comprise fresh issue of 5 per cent equity, as well as the offer for sale of 5 per cent of government equity.
Sourced from www.mydigitalfc.com
For the outgoing chairman of SAIL, SK Roongta, the single most significant contribution of his four-year tenure has been the steel PSU’s ability to organise its raw material security, which is central to the company’s expansion plans. “I think, we have made significant progress in raw material security,’’ Roongta told Financial Chronicle, days before his exit as head of the country’s largest steel producing company.
These were issues, which also list high as areas of concern capable of posing a serious challenge for the company. “Raw material security is a concern. Given the high volatility and non-availability of high-grade coking coal, we need to concentrate a great deal on this aspect,’’ he said at the event where SAIL announced results for the quarter ending March 31, 2010.
Asked what he would have ideally liked to achieve, Roongta said while many forward strides had been taken, such as organising the company’s finances, there were areas that need attention. “We have not been able to manage our iron ore resources well,” he said.
Under Roongta’s chairmanship, SAIL had worked out and continued to pursue many joint ventures (JVs) with global majors such as ArcelorMittal, Posco and Indian biggies like Tata. Is the interest of these companies aimed at future disinvestments of SAIL with them preparing to become bidders, should a situation like that arise at a later date, possibly even decades later? “The interest of these companies has nothing to do with disinvestments now or later. These are pure business and commercial decisions, prompted by factors like technology induction and other mutual gains,’’ Roongta said.
According to Roongta, while the JV between SAIL and Posco was at a pretty advanced stage, any agreement with ArcelorMittal and Tatas were very basic and preliminary and “too early to comment on”.
When asked if the Union government’s interjectory policies have led to a price correction of steel. Commenting on the company’s newly acquired Maharatna status, Roongta said that the status accords more powers and autonomy and the company is going to benefit from it, particularly in foreign investments and joint ventures (JVs). “We would have the authority at the SAIL board level itself to conclude JVs, which is a positive development,’’ he said.
Correction of prices in the Indian steel market fluctuates with global trends. “Already some producers have made corrections in prices this month. As you know, prices of long products were at their peak in early April. From that peak, they have come tumbling down by nearly 15 per cent at today’s levels. So this is a process of open markets where prices come up and go down. The market will decide prices,” he said.
Roongta also said that SAIL is open to a price reduction. “In a buoyant market, we increase prices. If the market demands, we should be able to reduce them. We have done it in the past,’’ he added.
Asked about the timing of SAIL’s follow on public offering (FPO), he said there are no deadlines. “There is no exact date for the SAIL FPO. An empowered committee of the government will be constituted. Then a decision would be reached,’’ he said.
In April, SAIL decided to shed 10 per cent government equity in the company. Additionally, it will raise 10 per cent equity, which is to be put through in two tranches. The FPO in both the tranches would comprise fresh issue of 5 per cent equity, as well as the offer for sale of 5 per cent of government equity.
Sourced from www.mydigitalfc.com
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