Steel Authority of India Limited (SAIL), India's largest steel producer yesterday signed a signed an agreement to form a 50:50 joint venture company with Shipping Corporation of India Limited (SCI) to take care of SAIL's import logistics.
As per the agreement, the joint venture company (JVC) will primarily take care of SAIL's shipping needs by owning and operating ships. The JVC, which will be registered at Kolkata and initially cater to around one million tonnes of SAIL's imported cargo annually, which will be expanded subsequently.
SAIL currently imports around 10 million tonnes (MT) of coking coal, a major input for steel making, per annum.
The company's requirement of imported coking coal would increase considerably in coming years in view of the ongoing expansion plan of SAIL that will nearly double SAIL's hot metal production capacity from the current level of around 14 MT.
The shipping JVC would enable SAIL to have control over part of its coking coal supply chain and effectively assist SAIL in mitigating risks existing in the volatile shipping market, said the steel maker in a statement.
SCI, which will bring its expertise in the shipping arena to the JVC, is already in the process of acquiring new vessels, and the JV will give its efforts a further boost.
Speaking on the occasion, S K Roongta, chairman of SAIL said that SAIL is keenly focused on ensuring its long-term raw material security and will continue to give thrust on logistics facilities and creation of infrastructure for smooth flow of raw materials and movement of finished products.