SAIL Signs Shipping Joint Venture Agreement

SAIL, Shipping Corp of India JV To Ship Imported Raw Materials

Steel Authority of India Ltd (SAIL) is to form a joint venture company with the Shipping Corporation of India (SCI) that will cater to the growing raw material import needs of the steel maker.

"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," the company's Chairman S.K. Roongta said.

The two state-run companies entered into an agreement on Monday to set up the JV in which both will have equal stake. The agreement was signed by SAIL Director (Finance) Mr. Soiles Bhattacharya and SCI Director (Technical & Off-shore Services) Mr. U.C. Grover in the presence of SAIL Chairman Mr. S.K. Roongta and SCI Chairman Mr. S. Hajara. Mr. Roongta 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.

The JV will ship around one million tonnes a year of raw materials used by the steel company with the prospect of an expansion in capacity later.

The deal enables SAIL, India's largest public-sector steel producer, to have control over part of its coking coal supply chain and mitigate the risks existing in avolatile shipping market.

SAIL currently imports around 10 million tonnes coking coal each year, a major input for steel making. The company expects its requirement of imported coking coal to increase as it plans to double its hot metal production capacity in the coming years from the current level of around 14 million tonnes.

SCI, India's largest shipping company, will bring its expertise in the shipping arena to the JV. It is already in the process of acquiring new vessels, according to a statement issued by SAIL.