The Hindu Business Line : Salem Steel posts operating profit

RIDING on the crest of surging demand for steel products, Steel Authority of India Ltd's Salem Steel Plant (SSP) has showed up an operating profit for the first time in the 2003-04 fiscal, which is good enough for the plant to make over its previous year's loss of Rs 120 crore.

The performance chart of the SSP for the just concluded fiscal year has seen SAIL's special steel unit excelling in capacity use in production of hot-rolled/cold-rolled stainless steel as well as carbon steel. It could also make impressive gains in overall sales of steel products and export of stainless steel by recording a total sales turnover of Rs 554 crore, a 30 per cent rise over the 2002-03 sales figures.

According to the SSP's annual working for the year 2003-04, its domestic sales of stainless steel at 36,000 tonnes grew by 19 per cent over the previous year in volume and value of this sales at Rs 356 crore has been higher by 25 per cent compared to the previous year. The plant's exports during the year almost doubled to 21,000 tonnes from the previous year's 10,750 tonnes and the value of exports in rupee terms stood at Rs 128 crore, a growth of 123 per cent.

The plant has accounted for a total saleable steel production during the year at 84,674 tonnes, which includes 57,842 tonnes of cold-rolled stainless steel.

Its overall steel sales for the year stood at 82,000 tonnes. The sales of cold-rolled stainless steel went up to 57,000 tonnes from the previous year's 41,224 tonnes.

Thanks to the enlarged volume of steel rolling done on job work, the SSP could manage to hot-roll 2.12 lakh tonnes of coils during the year against previous year's 1.50 lakh tonnes, a jump of 40 per cent. Its cold rolling mill too had produced 79,719 tonnes of annealed and pickled steel variety on job work basis during the year, which, according to the SSP, is a new peak.

Mr Mrinmoy Roy, who took over as the Executive Director of SSP only two months ago, has said that the SSP, whose market share during 2003-04 rose by 10 per cent, has targeted to match both its saleable steel production and sales at 1.40 lakh tonnes for the current year with a projected sales turnover of Rs 768 crore.

This would include an anticipated export of 36,000 tonnes at a value of Rs 200 crore for the 2004-05 period.

The SSP, according to Mr Roy, has sought to increase its market share in sectors such as railways, architecture and construction industry besides value-added items.

The plant also expects that the export demand in countries such as South Korea and China would drive its product movement.

The SSP could wipe off the previous year's loss of Rs 120 crore largely through the operating profit and this could be achieved through Rs 80 crore income generated through own sales and Rs 40 crore derived through hire rolling for other steel producers.