The Rashtriya Ispat Nigam Limited (RINL) appears to be in for a tough time in wiping out its losses, market penetration and reduction of the production cost, despite narrowing down its net losses during the 2017-18 fiscal.
The high cost involved in sourcing iron ore from the NMDC mines in Bailadilla of Chhattisgarh has emerged a major drawback for the corporate entity of Visakhapatnam Steel Plant (VSP) in braving the tough competitions from its rival steel-makers. Ramping up various units under the 7.3 MT modernisation project calls for stepping up efforts to penetrate into the unexplored market and diversify its products.
Further, the fear of disinvestment is haunting the RINL employees for the past several years with the successive governments declaring that they would offload 10% of equity. "If it happens, it will lead to selling of the steel plant with a land bank of around 22,000 acres to some corporate houses at a throwaway price," claims CITU State president Ch. Narsinga Rao. The trade unions also have a big responsibility in bringing pressure on the State and the Central Governments for allotment of captive mines, which is a long-pending demand. Even the State has not considered the RINL’s pleas for preferential treatment in using its steel in the construction of the capital at Amaravati and major irrigation projects such as Polavaram.
As per provisional figures, the RINL clocked a sales turnover of ₹16,500 crore in the 2017-18 fiscal, registering an increase of 31%. It also recorded earnings before interest, taxes, depreciation and amortisation (EBIDTA) of Rs.200 crore. Top officials of the RINL exude confidence that with the markets picking up, they are poised for good days ahead.
They say that the company is on recovery path to achieve a turnaround with increase in productivity after installation of pulverised coal injection technology in the blast furnaces.The RINL has finalised a plan for its outlook to produce 6.4 million tonne of hot metal, 6.3 million tonne of liquid steel and 5.7 million tonne of saleable steel.