NEW DELHI (Reuters) - Steel Authority of India Ltd (SAIL.NS), the country's largest domestic steel producer, expects its exports to double this fiscal year as a weak rupee makes its products more competitive.
Steelmakers such as SAIL and Jindal Steel and Power Ltd (JNSP.NS) have been looking to raise foreign sales to offset soft local demand, and SAIL's chairman C.S. Verma said the fall in the rupee over the past few months has helped.
"We are exporting mainly to the Middle East and neighbouring countries like Nepal and Bhutan," Verma told Reuters on Wednesday.
He said SAIL expects its exports to jump to 700,000 tonnes, generating sales worth about 25 billion rupees. Total production would be about 15 million tonnes.
The state-controlled firm is in the process of raising steel capacity to 17 million tonnes by March 2014, and plans to spend 120 billion rupees on the on-going expansion projects during the current fiscal year.
SAIL's net profit for the April-June quarter fell 35 percent as weak prices ate into a 5 percent growth in sales volume to 2.62 million tonnes.
But Verma said there was "no scope" for a further decline in prices and that SAIL, which has its own iron ore mines, would continue to run its plants at full capacity.
Capacity utilisation for Indian steel companies hit an all-time low of 82 percent last fiscal year due to a shortage of iron ore, according to D.S. Rawat, secretary general of lobby group ASSOCHAM.
Editing by Greg Mahlich