Rashtriya Ispat Nigam Limited, the corporate entity of Visakhapatnam Steel Plant, is getting ready to foray into manufacturing of flat products after laying emphasis on right product mix and value addition.
The Navratna company, which has been cleared by market regulator SEBI for listing, has adopted a two-pronged strategy for increasing its market presence. While concentrating on penetrating into rural market, the management wants to give thrust to cost reduction. This has become necessary as the Indian steel industry is facing serious threat due to prolonged recession and flooding of the market with China-made steel.
According to RINL sources, once it joins the club of listed companies, it will raise the required capital for its ambitious expansion plan. It pooled up Rs.12,300 crore for the 6.3-million tonne expansion project from its internal accruals. The company is increasing the productivity of blast furnaces and improving techno-economic parameters at a cost of Rs.5,000 crore to raise the capacity to 12 million tonne shortly.
Gifted with a land bank of 25,000 acres, excellent infrastructure and logistics, deep draft ports of Visakhapatnam and Gangavaram, it has drawn up a directional plan to expand to 20-million tonne to become the largest single location integrated steel plant. At present, RINL produces wire rods for wire drawing, bright bar, fasteners and rebars for construction for reinforcement, squares for bright bar, forging and re-rolling application and structurals for construction, fabrication and making leaf springs. Being market leader in long products, it is a major supplier to the construction, automobile and manufacturing sector. For its next phase of increasing capacity to 12- million tonne, the project report has been prepared by M.N. Dastur & Co.
During 2013-14, RINL achieved a turnover of Rs.13,527 crore. This year its plan to increase the turnover substantially may not fructify due to market slowdown, competition posed by dumping of cheap products from China and production loss suffered in the aftermath of Cyclone Hudhud, according to a senior official.