A slew of bold steps including austerity measures and increase in prices have helped Rashtriya Ispat Nigam Limited to narrow down its net losses from ₹1421 crore in 2015-16 to ₹1200 crore during 2016-17 (provisional figures).
Sources in the industry told The Hindu that RINL, the corporate entity of Visakhapatnam Steel Plant, India’s first shore-based integrated steel plant, could do better notwithstanding steep rise in raw material cost and prolonged dullness in the manufacturing and realty sectors.
Coking coal went up by 300% whereas there was no change in the price of iron ore. The interest burden due to Capex (capital expenditure) was estimated to be ₹200 crore to ₹250 crore.
The navratna company has borrowed about ₹10,000 crore to ₹11,000 crore for modernisation and expansion. For the ₹12,300-crore 6.3 million tonne expansion project, it has mopped up resources from internal accrual. Presently, it is enhancing the capacity by increasing the output of blast furnace and other critical facilities by one million tonne per annum with an investment of ₹4,000 crore.
The turnover of the company was ₹12,282 crore in 2015-16, which went up to ₹12,780 crore in 2016-17 accounting for a growth rate of nearly 4% despite slump in the industry.
Exuding confidence that they would achieve a turnover of about ₹15,000 crore, the MoU target set by the Ministry of Steel, RINL Chairman-cum-Managing Director P. Madhusudan said their thrust this year was to reduce cost of production, ensure capacity utilisation, ramp up new units installed under expansion and adhere to techno-economic efficiency parameters.
According to predictions, the steel industry, which is witnessing retarded growth during the past few years, is expected to pick up from second quarter onwards this fiscal. GST, which is proposed at 18%, might be reduced to 10% on domestic steel, a top executive of a private steelmaker said.
Independent rating agency ICRA has also predicted the cost of coking coal, one of the main raw materials for steelmaking will come down during current fiscal. Imposition of higher anti-dumping duty is also expected to discourage flooding of domestic market with cheap products from China.
