NEW DELHI, March 9: The Steel Authority of India Limited (SAIL) plans a joint venture with a technology provider, for a sophisticated steel service centre.The joint venture, which will be among the rare SAIL investments in green territories in the years to come, will possibly be a collaboration with a reputed steel service centre abroad. Sources in SAIL declined to give details about the project, saying that a feasibility study was not yet complete.
They, however, said, "There is not much expertise" on steel service centres at home. Such centres have, however, been in vogue for many years in Europe and the rest of the West. The Rs 14,000-crore-turnover steel giant is also setting up two customer service centres, through tie-ups with local partners at Faridabad and Pune. The Faridabad customer service centre will be in association with Mahindra and Mahindra and will essentially service auto vendors.
The Pune centre, too, will cut and size SAIL steel to suit the requirements of manufacturers ofautomotive parts. The service centres will also give customers access to tailor-made specifications like LPG cylinder blanks and help save on wastage in the form of scrap.
The service centre concept is fast catching on among steel companies at home, now striving hard to retain a grip over a fastidious market. Not too long ago, Tata Steel set up a joint venture with Rayersons of the US, for a similar centre that will cut, size and so, add value to finished steel products for end-users.
Tata Steel already has a system for supplying tailor-made steel for user-industries from its Jamshedpur works. The Tata-Rayersons joint venture is expected to add new dimensions to the customer-friendly strategy.The SAIL customer service centres at Pune and Faridabad and much of its new marketing focus in the coming years, will be on the burgeoning automobile industry. Among the major investments likely in the years ahead will be the upgradation of SAIL's cold rolling mill at Bokaro to produce car body sheets.
All theexisting automobile manufacturers at home, that are together hammering out 5,000 cars for the Indian consumer every year, entirely import car bodies at present. The mega investment in the SAIL cold rolling mill is only a speck on the drawing board at present, though.
The SAIL board has for now frozen all greenfield investments and decided to only spend the company's scarce resources on expanding and modernising existing facilities. Among the projects that will take off despite the drive to cut corners is the Rs 5,000-crore modernisation of SAIL's Bhilai steel plant.The public sector steel behemoth will also open up a captive iron ore mine at Rowghat, to make up for the depleting resources of its Dalli-Rajhara mines in Madhya Pradesh. Existing commitments like equity participation in the Bhilai Power Company, will also be honoured.
The joint venture for a steel service centre will be investment in a green area, but will also count among the industry's survival strategies in a free (for all) market. Itwill, however, require a nod from "navratna" SAIL's reconstituted board.
