The Hindu Business Line : Alloy Steel Plant on turnaround mode

ALLOY Steel Plant (ASP), under the Steel Authority of India Ltd (SAIL), is expected to make a net profit in the fourth quarter of 2004-05, marking a turnaround in its fortunes.

According to an ASP news release, in 2003-04, the unit registered a net loss of Rs 172 crore.

During the first nine months of 2004-05, its net loss was approximately Rs 50 crore.

However, by the end of financial year 2004-05, ASP hopes to reduce its annual net loss by over 65 per cent.

"We hope to end 2005-06 with a positive gross margin," Mr N. P. Jayaswal, ASP's executive director, stated in the press release.

The plant also registered its highest turnover of Rs 436 crore in the last fiscal.

He said the commissioning of AOD (Argon Oxygen Decarborisation) along with the balancing facilities had helped the plant.

In 2004-05, ASP's saleable steel production grew by 13 per cent to end at 1.28-lakh tonnes.

Production of liquid steel increased by six per cent and finished at 1.58 lakh.

Similarly, the crude steel production at 1.49-lakh tonnes also achieved a growth rate of six per cent.

The despatch of saleable steel also grew by 9 per cent to 1.25-lakh tonnes and the plant got 17,618 tonnes of special steel ingots from Durgapur Steel Plant, showing a growth of 28 per cent.

ASP, which was set up almost four decades back, is a producer of specialty steel items.

The last time this plant made a marginal net profit was in 1995-96.

Thereafter things turned bad for ASP and at one point SAIL had seriously contemplated hiving it off.

A senior ASP official explained that while the manpower has actually come down to around 2,700, production has gradually increased owing to certain significant management initiatives.

According to the release, ASP's turnaround would ensure more synergy between ASP and its sister unit, Salem Steel Plant.

"It would help both the units to produce stainless steel in a cost competitive manner and help SAIL to become a self-contained company for supplying stainless steel coils to domestic and international markets".

The SAIL Corporate Plan 2011-12 has earmarked over Rs 975 crore for the modernisation and expansion of both ASP and Salem Steel Plant.

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Alloy Steel Plant on turnaround mode