According to Steelorbis on January 4, a statement from India said that it has canceled the privatization process of Salem Steel Works (SSP), a wholly-owned subsidiary of the Indian Steel Authority. This is the third time since 2018 that SAIL's subsidiary** has been blocked.
India** cancels the privatization of the Salem steel plant
India cancelled its planned divestment of Salem Steel Works (SSP), the stainless steel production arm of the Steel Authority of India, last Wednesday and decided not to proceed with the strategy.
According to a statement from the Ministry of Finance, multiple expressions of interest have been received and bidders have been shortlisted. However, due to a lack of interest from these shortlisted bidders to "move further", the divestment proposal was dropped.
Salem Steel Works (SSP) is SAIL's special steel unit, the first in India to offer wider stainless steel sheet coils. The plant can produce austenitic, ferritic, martensitic and low-nickel stainless steel coils and plates, with an annual production capacity of 70,000 tons for cold rolling mills and 36 tons for hot rolling mills40,000 tons, with an annual output of 180,000 tons of slabs. In addition, the plant has the country's first stainless steel blanking facility, which has the capacity to produce 3,600 tons of coins and utility blanks per year.
The three subsidiary strategic plans have been cancelled one after another
According to local reports, in 2018, the Cabinet Committee on Economic Affairs (CCEA) approved the strategy of the three divisions of the Steel Authority of India, but it did not go well
At the beginning of 2019, SAIL decided to halt the privatization of the Alloy Steel Mill (ASP) in Durgapur;
In 2022, the Visvesvaraya Steel Plant (VISP) in Bhadrati, Karnataka was cancelled due to a lack of interest from bidders.
SAIL invited a global letter of intent from SSP on July 4, 2019, and recently announced the cancellation of the privatization process.
In the current financial year, the budget has raised Rs 51,000 crore through divestments and strategies, but only Rs 1,005 has been raised so far, according to relevant dataRs 200 million.
The previously unsuccessful steel mill (VISP) has been shut down
According to a related report on February 28, 2023, due to high costs, low production and lack of self-contained iron ore, India** has initiated the process of closing the Veswiswaraya Steel Plant (VISP), a wholly-owned subsidiary of the Steel Authority of India***sail.
In 2016, India initially approved the strategic approach to the VISP, but the shortlisted bidders said they could not participate in the deal, forcing the letter of intent to be invalidated. According to **, the company's 267 regular employees at the time continued to close the steel mill.
*From the web for illustrative purposes only.
Steel Authority of India (Steel Authority) is a public sector enterprise headquartered in New Delhi, India. The company is part of India's Ministry of Steel and has an annual turnover of 10,539 in FY 2022-23800 million rupees ($13 billion). SAIL was founded on January 24, 1973 and has 59,350 employees. With an annual output of 18.29 million tonnes, it is India's largest state-owned steel producer. Relevant reports show that the company's hot metal production capacity will be further increased, and it is expected to reach the level of 50 million tons per year by 2025.
According to recent reports, the Steel Authority of India (India) is working on a plan to increase production capacity by 15 million tonnes per year in the first phase, which may reach 35 million tonnes per year, while saying that the steel industry is capital-intensive, and the funds will be a combination of internal accruals and market borrowings.
Despite the failure of three subsidiaries in a row and the setback in raising funds, the difficulties faced by steel mills still exist. However, in the long run, the closure and elimination of outdated production capacity is to enhance market competitiveness and adapt to changes in market demand, which will lay the foundation for steel mills to expand production capacity and future transformation and upgrading.