Iron in the hills
Salem’s Kanjamalai hills are rich in iron ore. On 15 May 1972 the government approved a steel plant at their foot, and construction began a month later. It became a unit of the Steel Authority of India (SAIL), specialising in stainless steel, the kind that goes into kitchen vessels, railway coaches and machinery.
Rolling and cutting
The cold-rolling mill started with 32,000 tonnes a year and was expanded in 1991 to about 70,000 tonnes. A hot-rolling mill was added, and on 24 December 1993 the plant commissioned India’s first blanking line, which cuts stainless steel into ready-made blanks that factories press straight into products.
Its sheets went to more than 37 countries, including Spain, the UK, Japan, Germany and Switzerland.
For sale, then not
In 2018 the Cabinet approved selling three smaller SAIL units, Salem among them. Expressions of interest were invited on 4 July 2019 and bidders were shortlisted. But the shortlisted bidders did not want to go further, and on 3 January 2024 the government annulled the process. The sales of the Durgapur alloy plant and the Bhadravati plant had also stalled.
A plant is worth what a buyer will pay for its future earnings. When no buyer steps forward, that is information too.
When no buyer steps forward, that is information too.
Points for a finance reader
- A niche can carry a small plant. Salem did not try to out-produce giant steel mills. It specialised in stainless sheets and blanks.
- Sell ready-to-use, not just raw. Pre-cut blanks save the buyer a step, and that step is worth paying for.
- Capacity used decides cost. A mill’s fixed cost is spread over the tonnes it actually rolls (CAS-2).