India-based steel major Sail’s net profits rose to Rs26.48bn in Q4, up 383pc from the prior quarter as the company improves its products mix and expanded its market reach. For the full year FY2020, Steel Authority of India Limited (Sail) reported net profit decline by 10pc to Rs21.21bn from the prior year. In FY2020, steel exports increased to 1.8mn mt, up by 54pc from a year ago.
|Sail’s results for Q4 and FY2020|
|(Rs Billion)||Q4FY2020||Q4FY2019||% Change||FY2020||FY2019||% Change|
In Q4, Sail produced 4.31mn mt crude steel (4.59mn mt hot metal) and 3.97mn mt saleable steel. Semis formed 19.06pc of total saleable steel production, while value-added was 1.71mn mt. The quarter’s steel sales were 3.74mn mt.
In FY2020, the company’s produced 16.15mn mt steel in FY2020, saleable steel production was a record 15.08mn mt, of which 57.6pc or 6.39mn mt was valued-added products and rest commodity steel. Among Sail’s top five integrated mills, 49.6pc of the product mix was flat steel, 30.1pc longs and 20.3pc semi-finished steel. For the full year, Sail’s steel sales was 14.23mn mt.
Recently product additions include narrow parallel flange beam 750 for the construction sector, Linke Hofmann Busch (lhb) wheels for the railways and customized products from the heavy commercial vehicles.
In FY2020, Sail achieved best-ever daily blast furnace productivity 1.80mt/m3 compared to 1.65mt/m3 a year ago. Sail produced 92.6pc of its crude steel through blast furnace route, 6.1pc was from THF and 1.3pc was from EAF route. Over 90pc of the production, that is, 14.60mn mt was through continuous cast (CC) and 9.6pc was through ingot route.
Sail has set a target to achieve 17.5mn mt steel production in FY2021.
Sail’s expansion and modernisation plan is all track to reach 21.4mn mt steel production and saleable steel production will reach 20.2mn mt. Technological upgrades include plans to reach 100pc steel production through blast furnace with total replacement of THF route and production through ingots teeming route will be replaced with CC to upto 94pc. Production volume will be enhanced by the addition of two blast furnace of 4,060m3 and 4,160m3.
The company has plans to build three new iron ore pellet plants; 4mn mt annual capacity plant in Gua, 1mn mt at Dalli and 2mn mt at RSP for utilization of accumulated and generated iron ore fines. Existing iron ore mines capacities are being ramped up to meet raw material demands of the company post the expansion.
In term of capex, the expected cost of ongoing expansion projects is Rs391.31bn. Plans to improve product mix, technology upgrades and improvement of environmental stats would increase Sail’s total estimated cost of expansion to Rs 618.70bn.
Sail aims to expand its annual production capacity to 50mn mt by 2030-2031, in a phased manner. By the end of phase one, Sail’s capacity will reach 35mn mt by 2025-2026.
Sail strives to improve sales and share of value-added and special steels products through aggressive cost optimization and expects the government’s focus on self-reliance to boost domestic steel consumption, said the company’s release quoting Chairman, Anil Kumar Chaudhary. SAIL is scaling up production in line with improving demand he added.