VISAKHAPATNAM:The turnover of Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant, reported a 13 percent decline, thanks to the devastating cyclone Hudhud, which hindered the functioning of the steel plant for almost a month in October, last year. The public sector giant recorded a sales turnover of Rs 11,718 crore during 2014-15, which fell from Rs 13,489 crore earned during the previous fiscal. But, the exports registered a record high of Rs 868 crore during 2014-15 and is estimated to cross Rs 1,000-crore mark during 2015-16.
RINL chairman and managing director P Madhusudan told mediamen here Saturday that the sluggish market conditions and the Hudhud cyclone were mainly responsible for the poor show. He also blamed the surge in imports from China and Ukraine in the domestic market for the fall in the sales by about 13 per cent.
“But we closed the financial year on a promising note with a growth of three per cent in steel production. Further, the company registered a best performance for any month since inception with respect to hot metal, liquid steel and saleable steel production in March this year,” he said.
Exuding confidence about the RINL’s performance in the current financial year, the CMD said that a target of Rs 18,000-crore sales turnover and production of 4.3 million tonnes of saleable steel has been set for the fiscal. The prices of raw material such as coal fell considerably, while that of iron ore were steady. “With the proposals for constructing the new capital for Andhra Pradesh and smart cities and infrastructure projects, we are optimistic about the growth in sales. Hence, we have set ourselves a target of 30 per cent more when compared to the previous fiscal,” he added.
Elaborating on the expansion plans, Madhusudan said that under the expansion plan to achieve a production of 6.3 million tonnes per annum of liquid steel, all major units of Stage-I have been commissioned and are under regular operation. Except for the commissioning of the Structural Mill, which is planned for April/May, the rest of the Stage-II expansion has been completed. The modernisation works are also progressing at a brisk pace and the Steel Plant will achieve a production capacity of 7.3 mtpa by 2018.
“The general situation has improved and we are planning to expand our operations beyond India. We have set up an office in Colombo and are also exploring markets in the Gulf region as well,” Madhusudan said. According to him, the Middle East and the South East Asian countries provide good scope for the RINL for improving the sales. He admitted that company is facing problems for want of captive iron ore mines, but claimed to be making all efforts to cut down the cost of production to compete in the market and offer the RINL products at a competitive price.
Diversification Plans Revealed
Exploring different avenues to improve revenue, the RINL is planning diversification and is likely to launch a couple of projects over the next couple of years. The proposals include Rail Wheel Plant at Rae Bareli, Slurry Pipeline from Nagarnar to Visakhapatnam through a joint venture with the National Mineral Development Corporation and manufacturing of Transmission Line Towers at Visakhapatnam through another joint venture with the Power Grid Corporation of India Limited progressed further during the year. Besides, the RINL is in talks with the NTPC for starting a joint venture and set up a power plant of 500 MW in Visakhapatnam. “We have enough land and they (NTPC) have the expertise and the required coal linkage besides both the companies having good amount of funds available for investment,” pointed out Madhusudan. For Banera Iron Ore block allotted by the Rajasthan government, the phase-1 exploration has been completed and mining plan has been submitted to the Indian Bureau of Mines (IBM) for approval. The company is also contemplating over expanding its capacity by another 4-4.5 mtpa after completing the current phase-II expansion.