SIFL makes a turnaround; targets higher turnover

Staff Reporter

ATHANI (THRISSUR): The story of the State-owned Steel and Industrial Forgings Limited (SIFL) at Athani in Thrissur district is one of a dramatic turnaround. The sick unit which was referred to the Board for Industrial and Financial Reconstruction (BIFR) in the mid-1990s is now a profit-making manufacturer of high-end steel and industrial forgings.

SIFL, a subsidiary of Steel Industries Limited Kerala (SILK), which had an accumulated loss of about Rs.15 crores in 1993-94 has been making profit almost consistently since 1995 (except in 2000-01). Last year the company made a profit of Rs.1.3 crores. By then it had made an accumulated profit of Rs.25 lakhs after making up for all the accumulated losses.

Addressing a press conference here on Thursday, its chairman A. Yunaskujnu, managing director K. Shamsuddin and SILK managing director T.C. Khalid said SIFL had achieved the turnaround without much additional investments or acquisition of machineries. The Government made a contribution of Rs.6 crores to Rs.7 crores for arriving at a one-time settlement with financial institutions under a BIFR revival package. The banks were advised to reduce the interest rates on loans advanced to SIFL. Interestingly, some other public sector companies in the forging sector were also accorded similar packages around the same time. But not many could make a similar comeback as SIFL did.

``Our main strength is our innovative capacity and the dedication of our workers. They could develop sophisticated and high-quality products needed by sectors such as the aviation and the defence. Today SIFL makes complex and high precision forgings for establishments such as the Indian Space Research Organisation, Railways, Bharat Heavy Electricals Limited and Bharat Earth Movers, besides the defence and civil aviation units,'' the officials said.

They said the decision to concentrate on high-value forgings for the sophisticated industries helped achieve the turnaround. An increase in demand for forgings and a hike in their prices also contributed significantly. SIFL now exports products directly to countries such as Indonesia and Qatar and indirectly to the U.S. and the U.K.

Replying to questions, the officials said there were plans for increasing the presence of SIFL products in both domestic and international markets. The company's turnover which stood at Rs.16 crores in 2001 doubled to Rs.32 crores in 2004-05. The plan is to enhance the turnover to Rs.100 crores by 2010. But even now the capacity utilisation is only 50 per cent as against the industry average of 70 per cent.

They said the company had submitted a Rs.7-crore plan to the Government for augmenting the facilities and recruiting additional staff. However, trade union representatives who were present at the press conference cautioned that the focus should be on augmenting the facilities. ``If we increase the staff strength without adding more facilities that will eat away the hard-earned profit of the company,'' they said.

The anniversary celebrations of SIFL and a seminar organised here in connection with it on Friday will be attended by Speaker Therambil Ramakrishnan, Industries Minister V.K. Ebrahim Kunju and Labour Minister Babu Divakaran.