Rashtriya Ispat Nigam Limited, the corporate entity of Visakhapatnam Steel Plant – the largest unit in Andhra Pradesh – is all set to achieve an all-time high turnover of ₹15,000 crore and narrow down its net losses (between ₹900 crore and ₹1,000 crore) during 2017-18.
The improvement in performance is attributed to the market showing signs of recovery during the last quarter of the current fiscal.
The ‘navratna’ company had clocked a turnover of ₹12,781 crore and a net loss of ₹1,236 crore during 2016-17.
Prolonged slump
After recording net profit continuously from 2002-03 to 2014-15, it registered a net loss of ₹1,421 crore during 2015-16 due to a variety of factors such as prolonged slump and flooding of cheap steel in the market by Chinese manufacturers.
“Despite upward revision in the price three times at the rate of ₹500 to ₹4,000 per tonne during December owing to increase in international prices of coking coal and jacking up of price of iron ore by the National Mineral Development Corporation, the main source of raw material for RINL, we will achieve a sales volume of around 5 lakh tonnes as against 4.12 lakh tonnes during the current month,” a senior official of the company told The Hindu .
NMDC increased iron ore price by ₹400 to ₹500 per tonne during the month. The official said they were expecting to produce 5.5 million tonnes of hot metal, 5.3 million tonnes of liquid steel, and 4.3 million tonnes of saleable steel during the fiscal. The management, through emphasis on quality and improvement of techno-economic parameters, ramped up production under the ₹12,300-crore, 6.3 million tonne expansion project. By adopting the pulverised coal injection technology in the blast furnaces, it raised the production capacity further by a tonne. It was keen on wiping out the losses during the next financial year. The production capacity of liquid steel, which is now 5.3 million tonne, is poised to go up to 6.3 million tonne next year.
A handicap
“Despite not having captive mines, we want to ensure optimum utilisation of available resources,” the official said. While SAIL spends 45% of its production cost on raw material as against 35% by Tata Steel, RINL incurs 60% of its cost on raw material purchase and transportation.
“The major handicap notwithstanding, we want to ensure a bright future for the steel plant by diversifying into value-added products and undertaking an aggressive marketing policy and strengthening the network in the rural areas,” he stated.
Steel consumption during the year in the country increased by 5% due to changing dynamics of the market, mainly the thrust being laid on infrastructure and manufacturing sectors.
