After incurring loss for the third consecutive year, the Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant, is poised to post marginal net profit during 2018-19, going by the positive signs of changing market scenario.
“Going by the projections, we may earn a cash profit of ₹1,000 crore during the year as we could get ₹90 crore cash profit in March 2018,” RINL CMD P. Madhusudan told The Hindu .
Cost-cutting measures
The ‘navratna’ company, with headquarters in Visakhapatnam, narrowed down its net loss from ₹1,236 crore to ₹900 crore (provisional figures) during 2017-18 by adopting various cost-cutting measures and adhering to the techno-economic parameters.
Now, it has an equity capital of ₹4,890 crore and net worth of ₹7,200 crore. Its interest burden is over ₹850 crore per annum.
RINL recently completed its 7.3 million tonne modernisation and expansion project after commissioning Caster-4 in Steel Melt Shop-2. While the expansion from 3 million tonne to 6.3 million tonne cost it ₹12,300 crore, the blast furnace modernisation and 7.3 million tonne expansion led to an expenditure of ₹4,000 crore.
Predicting a bright future, Mr. Madhusudan, who will retire from service on May 31, said they could ensure higher volume of production by stabilising the expansion units and completing installation of pulverised coal injection on the blast furnaces to earn a benefit of ₹100 crore through savings on coal consumption.
During 2018-19, the company is expected to produce 6.3 million tonne crude steel and 5.7 million tonne saleable steel – over 20% higher than the previous year.
“The market is showing signs of recovery. We expect the demand for steel will further go up, going by the feedback we have received at the customer meets in various parts of the country,” Mr. Madhusudan said.
Increase in production of saleable steel by 1.2 million tonne had provided relief in fixed cost incurred by the company.
With a robust plant, right product mix and marketing, RINL would scale up further and put up an impressive turnaround story, the challenges notwithstanding, he said.
