Steel Authority of India is revamping itself and has brought down debt by around Rs 10,000 crore in three months under its new Chairperson, Soma Mondal. The company has planned a Capex of Rs 8,000 crore for FY 22 and is now holding a land bank that can help in expansion up to 50 million tonnes of capacity in the long run, said Mondal in an interaction with Bhavya Dilipkumar and Satish John. Edited excerpts:You spearheaded several initiatives such as the Comprehensive Turnaround Roadmap for the Company since 2017. What are some of the challenges the company has right now, and what are your priorities?We had gone through a lot of challenges. And one of the main challenges was the ramping up of the planned investment, that is the modernization and expansion plan (MEP). Next, we started putting the focus on the inventory, which we had in the plant in our stockyard, whether it was finished steel or raw material.. We could not do much investment in our mines, so our focus has been in the recent past on how to improve our mines and how to bring the best of both quality and quantity. With all this, the net impact was our focus was borrowings also. how to reduce borrowing, how to reduce our working capital and more.Our major priorities in the coming times will include enhancing customer adoption, CAPEX, sustained cash flow and profitability, raw materials securitisation, larger digital intervention, enhanced safety of the men and equipment.What is SAIL’s next phase of expansion given that the company has pared down debt considerably?We are in an advantageous position as we have a land bank, which not many have. All our plants have extra land. We have done a detailed study keeping this land bank in mind and we have been able to accommodate a total capacity of around 50 million tonnes from the present 20 million tonnes. We are working on phasing out of the capacities and you know we are a highly leveraged company. Now at debt levels around Rs 35,000 crore, I would say the good times are ahead.What are some timelines for the next phase of expansion? And what is your comfort level in terms of debt in the books to undertake these expansions?It’s too early for me to comment, as it is still in the planning stage. But at the current level of debt, I think the time is right. We had some delays in terms of expansion and volumes in the past due to various reasons. And the Capex we planned for last year was around Rs 2,000 crore and this year it will be around Rs 8,000 crore. When we do the expansion, we would go plant-wise; we would not do all the plants together, but it’s too early for me to tell. But we will be announcing the plan at least this year.The company has reduced debt substantially, but what is your target? What is the ideal debt level for SAIL?Our debt to equity is much below 1 now from 1.67 or so sometime back. We are at around Rs 35,000 crore which is not bad, but surely if we start executing some more plans it will go down considerably. In the last three months, we were able to bring down debt by Rs 10,000 crore and now the most important thing is to increase production and sell. Given that the market is good, I’m hopeful that we will be able to sell. Giving a target is difficult now as a lot of it depends on external factors too.Can we expect further reduction in debt when some units of SAIL get divested?The units that will be privatized are a part of SAIL. So the debt doesn’t go along with it as it is in SAIL’s account. It is a going concern. The process is under the department of investment and public asset management (DIPAM).What were some key strategies you used to bring down the debt levels? And we heard that there are some government dues pending. Are those recovered?We had a major chunk lying with the government departments but that has been reduced by 25% and now most of it is secured. In the last few months, one thing we focused on is clearing the inventory. Then we had scrap lying everywhere and we focused on selling that as well. We reduced our cost by increasing volumes which led to additional cash-flow. One thing to note is along with Rs 15,000 crore of debt reduction our interest cost too came down by Rs 1,000 crore.Has the sale of iron ore in the market helped earning revenues in the market and to reduce debt?Revenue from mines is around Rs 450 crore. We targeted more but for various constraints like logistics and government permissions, we have not been able to reach our target level. Considering a shortage in the country for iron ore, we have a very high target of producing around 20 million tonnes. Let’s see where we reach.We hear that SAIL is planning to put up stamp-charged coke oven batteries to increase the usage of domestic coal in the blend. What is the investment and timeline on this?Putting up this will cost around Rs 2,000 crore but right now we have to revamp some of our factories. So this is not necessarily linked with our next phase of expansion but it will be an AMR, addition, modification and rectification plan. This will go for approval soon and then we will know more about it.The ministry of steel has a plan to take India’s steel production to 300 million tonnes by 2030 from 110 million tonnes now. What will be SAIL’s contribution here?When the national steel policy came up we undertook a desktop study, and we found that we would be reaching around 50 million tonne capacity by around 2030. But considering that we are focusing on bringing down debt now and due to the pandemic we may not be able to achieve that by 2030, but that’s where we are aiming at right now.SAIL has a joint venture with other PSUs and private players to secure your raw material and acquire mines abroad. Is there any investment planned in that?In this regard, there was a company called ICVL (International Coal Ventures Ltd) which was found and we have taken across an asset from Mozambique, which is functional. In fact, SAIL has been taking iron ore and coking coal from that Mozambique mine. We have a lot of reserves, but there are also some logistics issues. We need to see how to ramp up capacities from the mines to the port. In terms of scouting for other mines, if we see any good proposal, we will surely look at it.You would have experienced many commodity cycles in your tenure. What is your view on the present one?In the major consuming countries and producing countries like China, we see their government’s major push on infrastructure but they also have targets to reduce greenhouse gases. Thus, they have already given up much of their inefficient and polluting units, so there will be a supply and demand gap. Look at India, we have also given a major push for Infra, and even the auto sector has revived. Seeing all this, I would expect the steel upcycle to continue.