The Hindu : RSP to revamp CR mill

Online edition of India's National Newspaper
Thursday, Jun 06, 2002

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Business

RSP to revamp CR mill

By Our Staff Reporter

KOLKATA JUNE 5. Faced with the problem of high cost of production and low prices of flat products, Rourkela Steel Plant (RSP) is devising ways and means to cut the net loss by Rs. 500 crores. The plant recorded a loss of Rs. 645 crores (before interest). After provisioning of interest payment, the loss was Rs. 1036 crores, about 60 per cent of the net loss incurred by Steel Authority of India (SAIL). The plant also suffers from low value addition.

Talking to The Hindu, executive director, RSP, S. Mishra, said apart from measures taken to beat the low realisation per tonne of salable steel by enhancing volumes through better packaging, on-time product delivery and servicing, the plant would adopt a number of low cost revamp schemes. The board okayed proposals to reduce the loss by 50 per cent. The plant management plans to seek Rs. 100 crore investment to revamp its age-old cold rolling mill. The efforts to improve product quality and after-sales service were successful in increasing sales volumes. "In 2001-02 our sales volumes grew by 14 per cent".

The main hurdle before the plant to come back in the black, however, is its high cost of production. Sources said that the present cost of production of per tonne of hot metal is Rs. 7,000, much higher than any other steel plant in the country.

Meanwhile, problems relating to low quality of raw material, which has already been identified as one of the main reasons behind the high cost of production, may persist for some more time. According to sources, SAIL's bid to develop captive mines at Taldih for RSP by June this year is set to be delayed due to non-availability of some statutory clearances. Taldih has a proven reserve of over 64 per cent ferrous content and is expected to replace supplies from the traditional captive mines at Barsuan and Kalta.

Responding to the plant's plea for better ore supply, SAIL had enhanced supplies of fines from its prized reserve at Meghataburu-Kiriburu, originally linked to Bokaro Steel Plant, beginning with the fourth quarter of last fiscal. Also, a number of measures were adopted to improve the quality of raw material through blending and other external measures.

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