Rashtriya Ispat Nigam Ltd (Visakhaptnam steel plant) is planning to focus more on exports and is opening its first overseas marketing office soon in Colombo, according to the Chairman and Managing Director, A.P Choudhary.
The CMD, set to retire by the year-end, said at a press meet here on Thursday night that the company’s expansion project was on course and most of the new units would commence production.
“The steel melt shop, where unfortunately an accident occurred last year, would also be operationalised soon. There is no problem with the expansion project. There is no compromise on quality,’’ he said.
He said the market conditions were sluggish and at present the market was witnessing a downturn.
“Nevertheless, our products are accepted very well in the market. We have opened seven new offices in the country and we are opening an overseas marketing office in Colombo soon. Last year, we exported products worth Rs 600 crore and during the current financial year, the figure will cross the Rs 1,000-crore mark. We are making all efforts to bring the inventory down even in the sluggish market,’’ he said.
He said that the capacity of the plant would rise to 6.3 million tonnes after the completion of the current phase of expansion and “the upgrading of the existing units is also being taken up at a cost of Rs 5,000 crore, after which the capacity will be 7.3 mt of liquid steel per annum. Ultimately, we want to have a 20-mt plant here.’’
Raw material security
Admitting that lack of captive iron ore mines was the biggest handicap for RINL, he said that efforts were being made all the time to address the problem and the company had made considerable headway in recent times.
“The Rajasthan Government has allotted us mines in Bhilwara district and we are conducting the preliminary surveys and other works there. We will take up exploration there. The AP Government has allotted an iron ore block in Anantapur district and we have signed a pact with AP Mineral Development Corporation and KIOCL. KIOCL will set up a beneficiation plant in Anantapur district and supply us 50 per cent of the pellets and the rest may also be sold to us or in the open market at mutually agreed prices,’’ he said.
Besides, the AP Government had also allotted Bayyaram iron ore mines at Khammam district in Telangana region and RINL had agreed to set up a beneficiation plant there also to make use of the low-grade iron ore.
“We have also acquired majority stake in the Bird group of companies in Odisha and we are making all efforts to access the iron ore in that state. Therefore, there will be no problem for our expansion projects,’’ he added.
He said there would be no problem in financing the expansion project and “when the market conditions are conducive, the company will also go in for IPO’’.
P. Madhusudhan, Director (Finance) designated to be the next CMD, also spoke on the financial performance of the company and its capacity to fund expansion projects.