After facing losses for two years, the Rashtriya Ispat Nigam Limited — Visakhapatnam Steel Plant — is finally set to make operational profit by the end of the current financial year, according to its Chairman and Managing Director, P Madhusudan.
He was reviewing the performance of the plant and said the steel plant had recovered well during the current financial year (2017-18) after two difficult years due to market slowdown and other contingencies such as the Hudhud cyclone.
“We have achieved a turnaround during the current fiscal after hitting the recovery path in 2016-17. We have reduced the net loss by ₹400 crore to around ₹900 crore and we expect to achieve break-even and a nominal operational profit of ₹100 crore or so by the end of the current fiscal. We expect 2018-19 to be a good year,” he said.
Madhusudan said RINL had successfully completed the expansion project (doubling the original capacity to 6.3 million tonnes) and adding an additional 1 mt by taking up the modernisation project, taking the total capacity to 7.3 mt.
“We have met the entire cost of ₹16,000 crore for expansion and modernisation through internal accruals and loans,” he said.
Madhusudan said the prices of coal and iron ore had gone up during the past few months, pushing up the cost of production but still the plant’s performance was good. He admitted that the steel plant’s efforts to acquire iron ore mines for captive use had not made much headway during the past few years.
However, the AP government had agreed to allot the iron ore mines in West Godavari district to the plant and a joint venture will have to be formed to exploit the mines.
He said RINL had during the current year taken up coastal shipping of products to Kochi, Mumbai and Ahmedabad.