SAIL to invest in the upsurge of the Indian auto market

The growing Indian auto market is becoming a tempting sector to invest, this time round its the steelmakers Steel Authority of India Ltd (SAIL)that  is planning to manufacture auto grade steel.

Mr C.S. Verma, the Chairman in SAIL said that in the wake of setting up an all new cold rolling (CR) which can hold a capacity of 1.2 million tonnes per annum (mtpa), an investment of nearly Rs 70,000 crore as a part of modernisation programme has been made. The new establishment will be manufactured at the SAIL's Bokaro manufacturing unit and it is looking forward to target the white goods and automobile sectors.

He further added that the company expects that the fast paced growth of the Indian car market is an important factor in the rising steel demand mainly for the CR products. In Bokaro production unit of SAIL which is the major flat steel manufacturing unit, it is increasing the volume. Upgrading its technology is also being looked for.

An all new cold rolling unit is being established mated with tandem mill and pickling, electrolytic cleaning line, 100 per cent hydrogen annealing, automatic packing stations, tension levelling and more.

He also stated the company is establishing the galvanising lines for CR and hot rolled (HR) products. Important projects such as de-sulphurisation facilities and enhancing of the hot strip mill are in process. The company has already arranged for supplying of oiled material and HR pickled.

As per the auto industry experts, the auto mobile industry demands for almost 10 per cent of the overall steel supply. Indian auto manufacturer mainly, ship huge quantities of auto-grade steel from Korean and Japanese companies. Looking at the Indian steel market Tata steel and Essar Steel are the largest supplier in the auto sector. Various steel producer have declared new investments for manufacturing of the auto-grade steel for India.

One such investor is Posco, the Korean firm which is planning to invest $284 million for the cold rolled steel unit in Maharashtra with 1.8 mtpa. Nippon Steel the Japanese firm is setting up an auto steel pipe unit in Rajasthan with an investment of Rs 164 crore. It is expected that both the units will start by 2012.

Mr Verma also said that the R&D centre of SAIL has already made the grades for under-the-bonnet and chassis. He said as the units will be ready for making the skin body sheets, SAIL is sure of making components for it too. He further added that the company is speculating that the new plant can supply all the necessary requirements of galvanised, cold rolled and hot rolled. But as per him the company will not be able to supply skin materials as for that IF grade steel is needed.

In the second stage of expansion in the Bokaro steel plant, when the SMS-I will be over for SMS-III, new facilities will be affixed at steel melting stage. It will help SAIL to meet the needs of the steel grades of the other skin materials also. In the last phase, a colour coat line will also be envisaged with the already existing units in its respective place. SAIL is also expected to meet the market needs of under-the-bonnet, Chassis and outer body sheet but at a later stage.

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