SAIL gets management control of Steel Complex in Kerala

Tuesday, 15 Feb 2011

Maharatna Steel Authority of India Limited has formally acquired 50% of the shares of Steel Complex Limited in Kozhikode held by the Government of Kerala and taken over the operations of SCL on 13th February 2011.

SAIL-SCL Limited, the joint venture company resulting from the acquisition, will work towards the revival of SCL by setting up a new rolling mill of 65,000 tonnes per annum capacity for producing high grade TMT bars at an estimated investment of INR 45 crore. The JV is expected to be a milestone in the government’s policy of bringing together synergies of PSUs and strengthening them to be competitive in the market.

On the request of the government of Kerala, SAIL had signed a MoU in May 2008 for revival of SCL, owned by the state government. Subsequently, a JV agreement was signed between government of Kerala and SCL in December 2008 to enable acquisition of shareholding by SAIL, development of SCL by setting up a rolling mill and fulfillment of certain terms & conditions by the state government. Subsequent to fulfillment of conditions of the agreement, the JV became operational in December 2010. Operations of the JV will be synergized with SAIL’s core strengths by installation of billet conversion facility, raw material tie-ups and marketing of SCL products by SAIL.

SAIL-SCL Ltd presently has the capacity to produce 55,000 tonnes of liquid steel per annum through the electric arc furnace route and 50,000 tonnes of concast billets per year. The JV aims to tackle issues such as shortage of working capital and non-availability of good quality scrap by ensuring uninterrupted supply of scrap to maintain efficiency of operations and adding value to its products by converting billets into TMT bars. The possibility of marketing SCL products by harnessing SAIL’s nationwide dealer network is being explored.

Tags:SAIL, management control, Steel Complex, Kerala, shares, take over, Acquisitions, JV, PSUs, India steel industry,