ANIL AGAR­WAL LED VEDANTA ON A STEEL HUNT

Resource Digest - - RESOURCE DIGEST -

NRI bil­lion­aire Anil Agar­wal-led Vedanta may take the in­or­ganic route to en­ter In­dia’s steel sec­tor, the firm’s chief ex­ec­u­tive of­fi­cer Tom Albanese said. “Ac­qui­si­tion is al­ways an op­tion,” he said, re­mind­ing one of the fact that Agar­wal had built most of his busi­ness em­pire by tak­ing over firms.

A source in the com­pany had ear­lier said that Vedanta wants to set up a 5-mil­lion-tonne-per-an­num (mtpa) steel plant in Kar­nataka, en­tail­ing around R30,000 crore as in­vest­ment, along with a part­ner. Agar­wal’s metal and min­ing con­glom­er­ate is al­ready the coun­try’s largest iron ore pro­ducer and pro­ducer of non-fer­rous met­als such as alu­minium and zinc.

Agar­wal had in 2010 an­nounced the group’s plan to foray into steel-mak­ing in part­ner­ship with Larsen & Toubro by set­ting up a 5 mtpa plant at Palasponga in Odisha’s Keon­jhar district in two phases and signed a mem­o­ran­dum of un­der­stand­ing with the state gov­ern­ment. It had also ac­quired the as­sets of the un­der-con­struc­tion Bel­lary Steel and Al­loys (BSAL) in Kar­nataka for R220 crore by tak­ing part in com­pet­i­tive bid­ding, way back in 2011.

Head­quar­tered in Ban­ga­lore, BSAL had em­barked on set­ting up an in­te­grated 500,000 tpa steel plant and had lined up a plan to take it to 2 mtpa. It how­ever, could not com­plete the project and ran into debt. While the plant at Bel­lary is on the cards, Vedanta is also keen to ac­quire ex­ist­ing steel plants to be a ma­jor player in the field. There are many such as­sets in the coun­try that could po­ten­tially in­ter­est him. “Vedanta has a strong iron ore busi­ness and also a very strong and in­no­va­tive value-added busi­ness in Goa. I do think that there is tremen­dous iron ore resource in In­dia. There will be higher de­mand for steel in In­dia. We will keep our eyes open for op­por­tu­ni­ties for adding to our value-added busi­ness be­yond the cur­rent fa­cil­ity in Goa as and when op­por­tu­ni­ties present them­selves to us,” Albanese said. Iron ore is one of the key raw ma­te­ri­als for steel-mak­ing and hav­ing cap­tive mines al­ways helps a com­pany to re­main com­pet­i­tive. The im­me­di­ate tar­get, Albanese said, would be to en­sure that the com­pany’s iron ore busi­ness and the ex­ist­ing value-add busi­ness re­main strong. “We are try­ing to look around, en­vi­sion the time when ur­ban­i­sa­tion picks up in In­dia, when you see more gov­ern­ment spend­ing on in­fra­struc­ture, higher ex­pen­di­ture by In­dian fam­i­lies de­mand­ing higher qual­ity house­hold items and more man­u­fac­tur­ing ca­pac­ity de­vel­op­ing in In­dia. We keep our op­tions to be in a po­si­tion of strength in In­dia’s alu­minium, cop­per, oil and pos­si­bly steel in­dus­tries,” he said. In­dia’s steel ca­pac­ity cur­rently stands at around 118 mtpa and the gov­ern­ment tar­gets to take it to 300 mtpa by 2030.

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