Chandra Shekhar Verma, 51, has taken charge of the office of Chairman, Steel Authority of India Limited (SAIL). Prior to this assignment, Verma was Director (Finance) of Bharat Heavy Electricals Limited (BHEL), India's largest engineering and manufacturing enterprise in the energy-related / infrastructure sector.
Verma's prudent financial management and strategic deployment of scarce resources strengthened the competitive position of BHEL. As Director/Finance of BHEL since September 2005, Verma also had the distinction of spearheading the joint venture initiatives of the company with various state GENCOs. His efforts resulted in the signing of four such agreements with Tamil Nadu, Karnataka, Madhya Pradesh and Maharashtra that would leverage the sale of seven supercritical thermal power plants of BHEL. He also played a key role in the finalisation of various technology agreements of BHEL with Alstom, Siemens, GE and Sheffield Forgemasters.
Spanning nearly 29 years, Verma's career profile also covers stints as Director (Finance) of ITI Ltd. as Group General Manager of Indian Railway Finance Corporation, and as General Manager of Delhi Stock Exchange (DSE), besides experience of working in a Financial Institution for about nine years.
Fellow Member of the Institute of Company Secretaries of India (FCS) and of the Institute of Cost and Works Accountants of India (ICWAI), Verma is a Commerce post-graduate with a Master's degree in Business Administration and Bachelor's degree in Law and Legislatures. He has received many awards during his career, including 'Best CFO Award' of CNBC-TV 18 in the infrastructure sector for the year 2008-09 and 'Top Rankers Excellence Award for Best Professional' for the year 2008. During his tenure in BHEL, the company received the first prize in 'ICWAI National Award for Excellence in Best Cost Management Practices'.
SAIL, which has been recently accorded the status of 'Maharatna' by the Government of India, is currently preparing for divestment of 10 percent of its equity in two tranches and is implementing a Rs. 60,000-crore modernisation and expansion plan in its plants and mines. With Verma at its helm and his vast knowledge and experience in support, SAIL is poised to attain greater heights.

Pune-based privately owned Automag India, a company that designs and manufactures material handling systems, conveyors, steel mill equipment and special purpose equipment for various purposes like automobile assembly factories, electronic apparatus assembly appliances, food processing plants, etc. has signed a joint venture (JV) with a Japanese company named Kolec recently. The JV implies Kolec bringing in its technical expertise and the design know how while manufacturing will be done at the Automag end.
Automag will bring together the existing manufacturing and supply experience; while the product design and conceptualisation expertise of Kolec Japan to produce niche mobility products. An array of five products will be manufactured under this JV for which a new company called Maglec Handling Pvt Ltd has been created. While work will begin immediately on tow trucks, stackers and hand pallette trucks. Fork lifts will be a new category that Maglec will enter into at a later stage apart from AGVs (Auto Guided Vehicles). The key objective is to be able to maintain the same Japanese quality with Indian prices.
These products will be for sale for a global audience. Percentage of sale for the Indian market will be very small while it will be sold more in areas like North America, Europe, etc. Over the years, the company will keep coming up with newer offerings according to the JV also depending on the market condition and requirement. Maglec will manufacture battery operated products rather than product working on fossil fuel making it a greenfield JV. The factory spread across five acre land for phase one for current requirement will be ready after construction in December 2011. Close to Rs 75 crore will be invested by the company over a period of five years. Automag is over Rs 100 crore company, while the NKC Group of which Kolec is a part, is more than US$ 500 million.

Global steel prices may jump by half in 2010-11 as new capacity additions get delayed while raw material costs surge, according to Manoj Mohta, Head of Research at Crisil, a unit of Standard & Poors. Steel prices may rise to US$700 per ton in 2010-11 and to about US$ 800 in FY12 compared to US$ 475 in 2009-10.
A surge in raw material prices may reflect on steel prices also on rising demand from India and China. Supporting the view is demand currently outpacing supply. Crisil expects new supplies of about 35 million tons (MT) in India by 2012 and most of that will be from expansion of older mills than new projects as the latter are likely to get tangled in land acquisitions, mining licenses and fund raising processes.
According to India's five year plan, total steel-making capacity should touch 120 MT by 2012 from about 65 MT now, but Mohta does not expect the target to be met as several big projects are on hold. Global steel producers have long coveted -- and been frustrated in -- Asia's third-largest economy. ArcelorMittal and South Korea's Posco, which plan to spend a combined US$ 24 billion to build capacity in Eastern India, have yet to secure land more than two years after announcing their plans. Both have faced delays in allocation of mining leases and protests from local farmers against land acquisitions.
Indian players are all set to add close to 100 MT of additional production capacity mainly through brown field expansion, a small portion of 30-35 MT additional capacity to come in from greenfield projects too. With increasing pressure on raw material costs, small and marginal players may not be able to survive, paving way for buyouts by larger producers. Smaller players such as Brahmani Steel and Rathi Steel Bars are acquisition targets of a major Indian producer with facilities in Karnataka, while Bhushan Steel and Monnet Ispat are in the race to acquire a controlling stake in Orissa Sponge Iron and Steel.

ArcelorMittal is looking to acquire a stake in the Kolkata-based Ramsarup Industries, which has two iron ore leases in Orissa.
Without disclosing any names, Ramsarup, in a regulatory filing, said that it is in preliminary talks with multinational entities for opportunities in form of tie-up/ joint venture/demerger, etc. and all these are in preliminary stages.
Ramsarup's two iron ore mines in Orissa are estimated to have reserves of more than 50 million tons. ArcelorMittal, which has plans to set up three steel projects in India, has a stake of over 33 percent in domestic steel-maker Uttam Galva. It plans to build steel plants in Jharkhand, Orissa and Karnataka with an investment of Rs 1.3 lakh crore. The company, however, has been facing regulatory hurdles and problems in acquiring land over the past four years.

ArcelorMittal, the world's largest steelmaker, signed an agreement with the Karnataka government to set up a six million ton per annum (MTPA) steel plant in iron ore-rich Bellary district for Rs 30,000 crore. The company's proposed project in Karnataka would get priority over two other similar projects in Jharkhand and Orissa, held up due to land and environmental issues.
Since the company's other two steel projects in Orissa and Jharkhand have been hanging in fire due to land acquisition problems, the company has set Karnataka project on priorities. However, priorities may change depending upon approvals and market development. In Karnataka, the company has experienced positive support from the state government. In just about five months, it has reached the stage of signing a Memorandum of Understanding (MoU) and also the land acquisition is in progress.
Though the state government has allocated water for the proposed steel plant and a captive power plant at the site, the company is yet to get coal linkages. ArcelorMittal has not yet identified the mining site in the state. The project would be implemented in 36 months from the date of laying the foundation. Meanwhile, the state signed MoU's worth Rs 3 lakh crore on the inaugural day of GIM. Companies, present at the two-day event included JSW Steel, Brahmani Industries, Rajashree Cements, Hazira Steel, Infosys, Bharat Forge, Surya Vijayanagar Steel and Power, Surya Vijayanagar Cement, Shree Renuka Infra Projects, Bhushan Steel, Hindustan Aeronautics Limited, Shell Technology India, Mangalore Refinery and Petrochemicals Limited, Gas Authority of India Limited and Wipro. South Korean steel giant Posco returned to sign a MoU.

Surya Group of companies, lightening equipment major, is planning major investments including setting up steel and cement plants along with a power plant in Karnataka.
The company said it is looking at various funding options, one of which could be private equity (PE). Besides, the group is also investing Rs 100 crore on pipe and bulb plants in the state. The company is planning a steel plant with a capacity of six million tons per annum (MTPA) in Karnataka. Slag, a by-product of steel making, is difficult to despatch from the proposed steel plant. However, this can be a raw material for cement. That is how the idea of a cement plant came up.
The company is planning a cement plant with a capacity of 4 MTPA. To support both plants, the company plans to set up a power plant with an initial capacity of 100 MW. The plant will mainly be a captive plant, and the excess power will be sold in the market. The total outlay for these projects would be around Rs 25,000 crore and it would take three to four years to commence. It is working on avenues for raising funds to finance the proposed projects.
Besides, in Shimoga district, the company is investing around Rs 100 crore for setting up a pipe plant with a capacity of around 100,000 MTPA and a bulb plant. Both the plants are expected to go on stream by the beginning of next fiscal year and likely to generate around Rs 500 crore of revenue in the next two years.

Jindal Infrastructure Limited, a JSW Group company, which proposed to increase a Rs 2238 crore captive deep sea port at Bichitrapur in Orissa's Balsore district, has targeted to achieve a cargo throughput of 10 million ton per annum (MTPA) in the first phase.
The company will invest Rs 550 crore in the first phase which is scheduled for commissioning by 2013. The port's cargo handling is projected to reach 20 MTPA in the second phase to be operational by 2013 and 45 MTPA by 2020. JSW Infrastructure will invest Rs 750 crore and Rs 938 crore in the second phase and third phase respectively.
Cargo like coking coal, thermal coal, met coke, dolomite limestone, iron ore, finished steel products, bauxite, gypsum and clinker will be handled at the port. Out of the total investment of Rs 2238 crore, JSW will invest Rs 230 crore on land development, Rs 243 crore on berths, Rs 120 crore on breakwaters and embankments, Rs 900 crore on dredging and Rs 366 crore on handling equipment. Besides, Rs 150 crore will be invested on railway and road network while Rs 69 crore is earmarked for buildings and workshops. The port project will generate direct employment for 500 besides creating indirect employment avenues for 5000 others. The port will have a maximum draft of 18 metres. As per the land use plan of the project, the port back-up area including approaches will be 3500 acres, out of which 2500 acres will be developed through reclamation using dredged material and the balance 1000 acres will be provided by the state government.
The land development through reclamation will be done in a phased manner in which 500 acres will be developed in the first phase, 1000 acres in the second phase and 1500 acres in the third phase. The company has undertaken the techno-economic feasibility study on the port which includes water level measurement, sea current measurement and discharge management as well as desk studies on rainfall, temperature, relative humidity, visibility, wind and wave conditions, storms and cyclones.

Steel Authority of India Ltd (SAIL), the country's second largest steel maker, proposes to cut its labour costs. The company has set the proposal on priority. The newly joined Chairman, Chandra Shekhar Verma is currently working on it to conduct a detailed action plan to achieve higher labour productivity.
However, the company does not intend to rationalise staff strength. The company is also planning to make itself a truly global player, following an inorganic route, particularly for input asset acquisition in the value chain. The company would be moving aggressively on value-added products, especially in the power sector. Value-added products constitute 37 percent of total SAIL production compared to global standards, which is very low.
His appointment comes at a time when the government is looking at divesting 20 percent stake in the PSU. Currently, the government holds 86 percent stake in SAIL and the sale is estimated to mop up Rs 16,000 crore through a follow-on public offer (FPO), expected to be completed in two phases. SAIL posted a net profit of Rs 6,754 crore, up 9.4 percent from Rs 6,170 crore in 2008-09 in the year ended March 31, 2010 while total income declined to Rs 43,233 crore as against Rs 45,623 crore in the corresponding period, on lower net sales. It has set a target of achieving 23 million tons of hot metal production capacity by 2012-13.

Siemens VAI is strengthening its portfolio for iron and steelmaking. In future, it will not only develop and manufacture products and solutions in China and India, but also launch them onto the world market from these countries, according to Werner Auer, CEO of Siemens VAI.
“Since the economic crisis, the competition in plant engineering has
intensified significantly. Chinese and Indian companies are bringing their own plants onto the market successfully and ever more frequently.” Whereas hi-tech countries in Europe, the USA and Japan are continuing to focus on the efficiency and flexibility of their production processes, China and India want to produce, above all else, steel with simpler and cheaper plants to develop their infrastructure. “Almost half of total world investments of almost 21 billion euros are already being invested in such plants,” Auer said. Siemens is going to develop plants specifically for this segment of the market, and will also transfer the responsibility for design, production and marketing from Europe to China and India. Auer emphasised: “We are responding to the changes in the steel market, and strengthening our leading position for the long-term.”
China and India nowadays produce more than half of the world's steel. Tim Dawidowsky, previously responsible for Siemens's mining and steel business in China, explained that “we are expecting annual growth of over ten percent in Asia”, whereas the demand for new steel works is continuing to fall in Europe, the USA and Japan. As a result of continuing high growth rates, established local companies have started to offer plants themselves, some of which cost up to 40 percent less than those from European suppliers. Auer added “Examples from many industries in China and India show that today's local companies can be our competitors tomorrow, and that they will be offering the technologies which are currently the strengths of European plant constructors.”

Egypt's Industrial Development Authority has given ArcelorMittal, the world's largest steelmaker, a deadline to start building work on a steel plant near the Red Sea or lose its licence.
ArcelorMittal was granted a licence in 2008 to build a US$ 340 million plant to produce 1.6 million tons (MT) of steel using DRI technology and another 1.6 MT of billets, but held the project back as a result of the financial crisis.
"We are following regulations that any firm that violates the rules of a licence would have it revoked within the agreed time frame," Amr Assal said, confirming the August deadline.
The company would have to show its commitment by starting construction work to retain the licence, Assal said. The Luxembourg-based company, which has about eight percent of the global market, has not started building the site, which was meant to start production in 2009.
ArcelorMittal said in an statement that Egypt remained an important location for future investment.
"The consumption of steel in Egypt has been impacted by the recent financial crisis. Demand is now recovering and we plan to start discussions with the Egyptian government about the project imminently," the group said.
Steel rebar demand had remained relatively resilient in Egypt because of the need for housing and government infrastructure spending.

Mines Minister B K Handique rebuffed steel producers' demand for a ban on iron ore exports and warned that such a move will render thousands jobless and lead to air pollution in and around the mining areas.
In the absence of technology to use the fines (iron ore dust) in the country, steel makers would be able to commercially exploit only the lumps. This would mean heaps of iron ore dust creating a health hazard for people in the mining areas. “What we will do of the fines, he queried. You know it would be almost on the surface. If we don't export, there will be a lot of pollution,” he said. Handique asked the steel makers, who are lobbying for an outright ban or further increase in duties on ore exports, “Find a technology for it first. Then you talk about it.”
The government has levied 15 percent export duty on iron ore lumps and five percent on fines. The demand for restricting ore exports has also come from Steel Minister Virbhadra Singh, who wrote to Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee in this regard. The Steel Minister is pushing for restrictions with the contention that the country should preserve the ore reserves for domestic industry. India produces iron ore of over 200 million tons per annum (MTPA). The 72 million ton (MT) capacity domestic steel industry mainly consumes lumps, as it lacks the expensive finex technology required to refine the fines on the lines of China.
China, a major steel producer, consumes a large quantity of Indian fines. About 50 percent of the iron ore produced in the country is exported and fines constitute 85 percent of exports. Exports have nearly tripled over the last decade from about 38 MT in 2000-01 to about 106 MT in 2008-09.

India's steel consumption rose 12 percent, the fastest in at least one year, backed by strong demand from automobile, consumer durable and infrastructure sectors.
As per the provisional data of the Steel Ministry, domestic steel production did not keep pace with demand and rose just 1.5 percent to 5.1 million ton (MT) as compared to consumption of 5.4 MT. The excess demand was met through imports from countries like China and Japan.
Navin Vohra, Partner at advisory firm Ernst & Young said, “Domestic steel production is expected to grow 10 percent to 12 percent this fiscal year as some new capacities will come up later this year.”
Other analysts said that “Although steel demand is rising, consumers are taking a conservative approach towards fresh purchase as they anticipate further drop in steel prices. Domestic steel prices may come down marginally following the international movement in prices.”
India's steel consumption grew eight percent to 56.3 MT in the fiscal year which ended in March 2010 after shrinking a little a year ago due to the economic slowdown. The growing demand as well as the low base factor made it a staggering year for steel companies.

Faced with the grim possibility of losing out to Karnataka, the Bengal government has decided to go ahead with land acquisition for Bhushan Steel's project at Salanpur near Asansol without waiting for a formal no objection from Coal India Ltd (CIL).
The state has decided to kick off the acquisition process, though a joint committee, including the state and CIL officials, are yet to arrive at a consensus. The West Bengal Industrial Development Corporation (WBIDC) will try to acquire land with a new realignment where around 350 acres are being adjusted.
Bengal Industry Minister Nirupam Sen has directed the WBIDC to begin the process of acquiring 2,500 acres after realigning a 350 acre plot according to CIL demand.
Sen told, “We cannot wait endlessly. I have told my officials to go ahead.” Sen said some that minor adjustments could also be done when the land is finally acquired.
The state government had initiated the land acquisition notification for 1,100 acres in the middle of 2008, but the same had lapsed after CIL objected to the state's effort to put up the facility on coal bearing land in March last year. There are two villages within the identified area having around 1,500 people, and uncertainties exist on acquisition given the political turmoil in the state and the assembly elections next year.
Bhushan had signed an agreement with Bengal in 2007 for a two million ton (MT) steel plant, which was later enhanced to 6 MT. Last week, the company had signed a similar deal with Karnataka where many of its local and global peers such as Tata and Mittal are zooming in.

Steel Authority of India Limited’s Bhilai Steel Plant hopes to post 10 percent growth in hot metal production in the first quarter of the current fiscal over the previous best Q1 production of 1.27 million tons in the first quarter of 2009.
The growth of crude steel production during the period is likely to be around seven per cent over 1.24 million tons in the last year's Q1 production. The present trend suggests that the plant is likely to post 8 percent growth in the production of both finished steel and saleable steel in the first quarter of the current fiscal over the same period of last year when the production of finished steel was 836,811 tons and of saleable steel 1.06 million tons.
Both its steel melting shops SMS I and II too are poised for best ever Q1 production.
It said that blooming and billet mill, it is estimated, will register 11 percent growth over the previous year's Q1 production of 602,275 tons and Plate mill too 11 percent growth over 291,718 ton in the same period of last year.
The rail and structural mill that supplies top class rails of all lengths up to 260 metres to the Indian Railways will post five percent growth over the last fiscals Q1 production of 216,063 tons.
Meanwhile, BSP for the first time has produced normalised and tempered boiler quality steel plates in SA 387 Grade 12 Class Two for Bharat Heavy Electricals Limited, Tiruchi, where these plates will be used for assembly of piping components of high pressure boilers. This is highly sophisticated and critical grade alloy steel so far imported by BHEL.

National Mineral Development Corporation (NMDC) Ltd. plans to increase prices marginally only for local steel mills this quarter as the country seeks to curb inflation. The company, Asia's third-largest producer of the material, will charge more for exports to Japanese and Korean mills next quarter.
Inflation unexpectedly accelerated to 10.16 percent. NMDC, based in Hyderabad, raised the price of so called iron ore fines for Indian clients an interim 35 percent to Rs 2,600 (US$ 56) a ton from April 1 as it continued negotiations with buyers. It doubled prices for Japanese and South Korean mills including Nippon Steel Corporation and Posco to more than US$ 122 a ton.

Following the company board's approval to acquire certain coking coal mining concessions in the US, the Indian steelmaker JSW Steel Ltd has completed the acquisitions in question. These mines are located in West Virginia having total resources of 123 million metric tons (MMT) while the reserves are estimated to be around 45 MMT in part of the area where drilling was already done.
The company carried out due diligence on title, details of seams, resource estimates and quality, valuation and legal/financial matters, a company statement said, adding that the mines have railway and barge load-out facilities. The company applied for new permits to start work at some of the mines immediately, and these are expected to be granted in the next few months.
Based on the estimates on receipt of permits, it is planned to produce 1 MMT of coal in the first year starting from September 2010 which will go up to 3 MMT in the third year of operation.
This integration will benefit the company immensely even after factoring higher freight from US to India, JSW said, adding that the company is actively looking at acquisition of further coal mines to enhance the integration of coking coal.

Given the rush of investment proposals from steel firms to set up plants in Karnataka and their requirement for captive iron ore mines, the state government is likely to fulfil only half their demand.
VP Baligar, Principal Secretary, Industry and Commerce, Karnataka, said the government is most likely to meet only 30-50 percent requirement of the steel companies. Steel companies will have to purchase the rest from independent mining companies. This means steel companies, hoping to get assured and full supply of iron ore, will have to depend upon other mining firms for bulk of their supplies.
At the recently concluded global investors meet in Bangalore, the Karnataka government displayed investment proposals of over Rs 2 lakh crore from steel majors, with ArcelorMittal and Posco accounting for over Rs 30,000 crore each.
Given the large capacities of these steel plants, these companies have also sought captive iron ore mining leases. After two years gap, the government has recently started granting leases.
Baligar said that larger players will be given priority as they will provide greater value addition. The government, in its latest industrial policy, has accorded highest priority of granting mining leases to those companies engaged in value addition i.e. setting up of steel plants. This move is to discourage export of iron ore from the state, which currently stands at around 90-95 percent of the total output.
Baligar said that the state government has notified some new areas for mining activity with more such locations in the offing. The grant of mining leases has seen applications put forward by large players such as ArcelorMittal, Jindal, Tata Metaliks, Bhushan Steel, NMDC and even Brahmini Industries.
On the plans of South Korean steel major Posco setting up their plant in Karnataka, Baligar said that their team would be looking at four locations - Bagalkot, Gadag, Bellary and Bijapur, before finalising on the particular district.

With five year duration of the agreement between the Orissa government and Posco India for setting up a Rs 51,000 crore steel project near Paradip coming to an end, the state administration is all set to renew the Memorandum of Understanding (MoU).
The South Korean steel major which had been waiting to set up its 12 million tons per annum (MTPA) greenfield steel unit near Paradip in Jagatsinghpur district, had meanwhile made formal application for renewal of the MoU.
Though the company had signed MoU with the state government, the project failed to take off in the face of resistance from the local people.
"Renewal of the MoU is an official formality. Since work on the proposed project is on, there should be no difficulty in renewing it," Orissa Steel and Mines Minister Raghunath Mohanty said.