| Jain: The optimist
Calcutta, Nov. 13: Steel Authority of India Ltd (SAIL), the loss-making public sector steel company, is expected to make a turnaround in the next financial year provided the current upswing continues, new chairman V. S. Jain said.
Jain, who recently took over as chairman, also pointed out that the company would be able to cut down losses during current fiscal by 60-70 per cent from that incurred in the financial year ended March 31, 2002.
“The measures we had taken to survive during the recession over the last few years are now giving results. The cost cutting exercise has increased efficiency to a great deal and we are optimistic of making profits in the next year itself,” Jain said.
He also observed that the company has charted out plans for its four constituent plants to increase volumes in the next one year by 10 per cent, using the existing resources.
“Once we are able to use our existing resources optimally, it will give us over Rs 1,000 crore worth of additional income,” he said.
Jain said the company has been paying all the interest charges on time which itself shows that it is on a come-back trail.
SAIL, which is still in a severe cash crunch, is however weighing all investment plans.
“We shall invest in places where it is extremely necessary and which will assure us better realisation. We are currently considering several investment plans, but a concrete decision will take some more time,” he said.
As of now, the company has approved investments worth Rs 350 crore for Bhilai Steel Plant’s rail unit and Rs 80 crore in Rourkela Steel Plant. Both the investments, however, will be made during the next financial year.
The company expects to produce 10.2 million tonne of saleable steel this year, of which 8-10 per cent will be exported. “We are exploring several new markets like Italy, Spain, Sri Lanka and China for export opportunities,” he said.
In order to cut down on costs, the company is planning to offer another voluntary retirement scheme in January with a target of reducing manpower by 2,500. The last VRS saw separation of 3,900 workers, he said.
The company’s ultimate target is to reduce manpower from 1.4 lakh to just one lakh over a period of next four to five years.
SAIL has set a target of earning Rs 250 crore in the current financial year from selling of real estate.
It is also weighing options of divesting other non-core activities like hospitals and schools in the plant townships provided the prospective buyers are willing to take the responsibilities of the SAIL employees.
Regarding the divestment of Salem Steel Plant, he said the company is expecting price bid in two months time while the company is still on the look out for a serious buyer for the ailing Alloy Steel Plant.
On the Indian Iron and Steel Company, he said the IDBI, which is the operating agency, will submit its recommendations in the next two months time following which a concrete decision will be taken on funding the revival scheme.
“We need some Rs 350 crore for at least running the plant. Once the IDBI submits its proposal, we will take the matter to the government for its approval on the funding options,” he said.