New Delhi, March 30 (Inditop.com) Steel Authority of India Ltd (SAIL) will form a joint venture company (JVC) with the Shipping Corporation of India (SCI) that will cater to the growing raw material import needs of the steel maker.
“SAIL is keenly focused on ensuring its long-term raw material security and will continue to give thrust on logistics facilities and creation of infrastructure for smooth flow of raw materials and movement of finished products,” the company’s Chairman S.K. Roongta said.
The two state-run companies entered into an agreement Monday to set up the JVC in which both will have equal equity stake. The JVC will annually ship around one million tonnes of raw materials used by the steel company. The capacity will be expanded later.
The deal enables SAIL, India’s largest steel producer in the public sector, to have control over part of its coking coal supply chain and effectively mitigate the risks existing in the volatile shipping market.
At present, SAIL annually imports around 10 million tonnes coking coal, a major input for steel making. The requirement of imported coking coal would increase with the company planning to double its hot metal production capacity in the coming years from the current level of around 14 million tonnes.
SCI, India’s largest shipping company, will bring its expertise in the shipping arena to the JVC. It is already in the process of acquiring new vessels, according to a statement issued by SAIL.
