Steel ministry banks on brownfield expansion
Financial Express

Given the land acquisition problems faced by various steel companies including ArcelorMittal and Posco to set up proposed steel plants, the steel ministry is betting more on brownfield expansions to achieve the target of 120 million tonne (mt) production by 2012.

Against the existing steel production capacity of 56 mt, brownfield expansions are likely to add another 40 mt as compared to 28 mt from greenfield expansion planned over the next five years.
“Brownfield expansions of various companies both in the public and private sector are likely to fructify as the increased production has to be achieved by bringing in upgraded technologies in the existing facilities,” a senior steel ministry official told FE.
About 60% steel-capacity expansion would come through brownfield expansions while the rest is likely to come through greenfield expansions. The official, however, said that the greenfield expansions, till 2012, should not face many problems. Among the greenfield projects pledged by steel companies are 3 mt by Tata Steel, 6 mt by Essar, 5 mt by Bhagwati Steel Pvt Ltd, 1 mt by Monnet Ispat.

For brownfield expansions, state-owned Steel Authority of India Ltd (SAIL) is carrying out a technology upgrade programme to ramp up its production capacity to more than 24 mt, while Rashtriya Ispat Nigam Ltd is working on increasing production capacity to more than 6 mt over the next five years.

In the private sector, Tata Steel has already announced plans to increase its steel production capacity to 13 mt from the current 5 mt, while Essar Steel will up its capacity to 14.5 mt from the current 4.6 mt and JSW to 11 mt from current 4.1 mt over the next five years. The official was not sure about the target to achieve over 200 mt steel capacity by 2020 as some steel companies are yet to get iron ore linkages.

Cement firms raise prices again
Business Standard

Cement manufacturers have hiked cement prices in the North by 2 per cent with effect from October 1. This is the second price hike since March this year, when the cement industry promised the Union Commerce Minister Kamal Nath that it would not hike prices for one year even if there was an increase in the cost of inputs.

The last hike was done in July when companies increased prices by Rs 3-5 per 50 kg bag.

“Though, we are currently selling the previous stock at Rs 235 per 50 kg bag, once these are exhausted, the new stocks will be sold at Rs 240 per bag. All the companies have revised their selling prices from October 1,” said a cement dealer in the capital.

However, the companies have not confirmed the hike. “The railways have increased freight charges from October 1 and we expect prices to go up soon. But nothing has been done so far,” said an executive of a leading company.

Last week, all cement companies had raised prices by Rs 3 per bag in the West. Currently, the retail price per bag was ruling at Rs 260-265 in Mumbai, said Sanjay Ladiwala, president, Bombay Cement Stockists & Dealers Association.

The monsoon, which is considered a lean season as far as cement consumption is concerned, has largely come to an end — a positive factor for the industry.

Inflation, which was the main concern behind all the government efforts made early this year to contain cement prices, has dipped to a five-year low at 3.23 per cent for the week ended September 15. Cement has a weight of 1.73 per cent in the wholesale price index-based inflation.

The government, on its part, has taken every possible step to keep cement prices under check, though with no success. In January, the government abolished the 12.5 per cent customs duty on cement imports but no imports took place as international prices ruled higher. In February, it introduced a dual excise duty in its annual budget, but prices moved up instead. In April, the government withdrew the countervailing duty on cement imports and in May it replaced the dual excise duty with an ad valorem duty.

However, the prices continued to move up.