Saturday, May 29, 2004
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By Alok Mukherjee
NEW DELHI, MAY 28. The Steel Authority of India Limited (SAIL) has wiped out its accumulated losses of Rs. 2,765 crores and has booked the highest-ever net profit of Rs. 2,512 crores for 2003-04. The turnover of India's largest steel producer also jumped to an all-time high of Rs. 24,178 crores, a growth of 26 per cent over Rs.19, 207 crores achieved in 2002-03. SAIL had last reported a net profit of Rs. 133 crores in 1997-98.
Addressing a press conference here today, the SAIL Chairman-cum-Managing Director, V. S. Jain, said the turnaround was achieved due to sustained efforts since 1998 when the company went in for extensive cost cutting, focused production and marketing and other corporate measures.
The measures taken for cost cutting included a major thrust on reducing overall debt through repayment of loans as well as curtailing the cost of finance. The company succeeded in reducing its external borrowings by as much as Rs. 4,239 crores, bringing its total debt to a level of Rs. 8,689 crores at the close of the last fiscal year. The debt:equity ratio of the company came down to 1.86:1 at the close of 2003-04 from a level of 6.5:1 as on March 31, 2003. Besides, there had been downsizing in the company with as many as 45,000 employees leaving SAIL since 1998. The company's workforce was now down to 1.32 lakh persons.
With the company returning to the black, SAIL now has plans to expand its current capacity of 12.5 million tonnes to about 20 million tonnes by 2011-12 for which an investment of around Rs. 10,000 crores would be required.
While the company made fresh investment of Rs. 1,200 crores during 2003-04, it plans to increase it to Rs 1,500-2,500 crores during the current fiscal.
Mr. Jain said attempts would be made to finance as much of the expansion plan as possible through internal accruals and SAIL would go to the capital market only if required. As of now, there were no plans to enter the capital market, he said. "We will grow faster than any other steel producer in the country. We will take our production from 12.5 million tonnes to 20 million tonnes by 2011-12,'' Mr. Jain added.
Giving details about the investment plans till 2012, Mr. Jain said 50 per cent of it would be generated from internal accruals while the balance would be raised through borrowings. He, however, said that all efforts would be made to maintain a debt-equity ratio of 1:1 level.
Exuding confidence of maintaining the bottomline in the current financial year, he said, "I do not see any reason for the current robust performance not being maintained.'' He, however, said no dividend was required to be given to the Government and shareholders as the company was wiping out its past losses.
Responding to a question, he said steel prices were expected to be 5-6 per cent higher this year as compared to last year.
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