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Tap the big land resource

Power availability in Tamil Nadu has improved significantly. Salem Steel Plant’s Executive Director, A Bandyopadhyay, expressed relief over this development. This has helped production of hot-rolled and cold-rolled stainless steel at the Salem Steel Plant. The plant has received fresh orders from the mint for coin blanks as also from the railways.

However, capacity utilisation continues to be modest. The expectations on large demand for high quality stainless steel from newer segments are not materialising; more than two-thirds of the consumption of stainless steel is accounted by the utensils sector. This sector opts for cheaper grade products with low nickel content of the 200 series. With nickel price remaining high, there is a reluctance to go in for the 300- grade series with the higher nickel content of around 8 per cent (in the 200- series the nickel used is 0.2 – 0.3 per cent). Bandyopadhyay pointed to several other countries  which were going in for the 300- series that ensures better quality, durability and hygiene.

The Mint and the Railways use 400- series with a nickel content of 15-20 per cent. Bandyopadhyay pointed out that Japan was using stainless steel extensively as water pipes. He saw good potential in the manufacture of oil and chemical tankers which are at present made of mild steel: “corrosion reduces the life of such steel. Switching to the stainless steel can bring better economies over a longer span life,” Bandyopadhyay said.


Captive power plant by 2016

Salem Steel, originally conceived as an integrated steel plant, is endowed with a large land area of over 4400 acres. The surplus land can be utilised for a variety of large projects.  One such venture is the 2x60 MW power plant based on lignite proposed to be set up by the Neyveli Lignite Corporation  and the National Thermal Power Corporation along with SAIL. Own consumption  SSP accounts for 70 MW. Bandyopadhyay targets to commission the plant, involving an outlay of around Rs 1000 crore by 2016.  

Another such project that can be established in Salem is a rail coach factory. One has been announced for Palakkad in Kerala. With a high population density, land availability in Kerala is scarce and acquisition can pose problems. Locating it at Salem can bring twin advantages: the first is ready availability of land. The second, and more important, is a ready outlet for the SSP’s stainless steel sheets.

TN can leverage the strengths of PSUs

If only the Tamil Nadu government takes greater interest in maximising the resources available with the central public sector units (CPSUs), a lot can be achieved. For instance, with the support of Tamil Nadu government, NLC-BHEL-Tiruchi and the Salem Steel along with the L&T Construction can set up a lignite-based large capacity power plant at Salem. With the land acquisition around Neyveli posing serious problems, the proximity of Salem can make such project profitable and practicable. Likewise, Tamil Nadu can join hands with the ICF and the SSP to set up a rail coach factory at Salem.

IE has been suggesting  the state to take a much keener interest in such Central sector projects. Unfortunately, in the rule of the Dravidian parties, this vital contact is missing. Chief Minister Jayalalithaa, along with top bureaucrats of the state, should look into the enormous prospects that can be opened up for investments, especially in the light of the difficulties being experienced in acquiring land at modest costs and the large land resource available with the PSUs. – SV

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IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
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