The SAIL plant earned a cash profit for the past two consecutive fiscals — Rs 58 crore in 2000-01 and Rs 35 crore in 2001-02. The optimism is based mainly on three factors. First, blast furnace No 3 is being modernised and will be joining the production stream shortly. As a result, annual hot metal production will go up to over 2 million tonne (mt).
Second, higher production coupled with improvements in techno- economic parameters will reduce the cost of production.
Third, increasing demand for long products in the domestic market has firmed up prices and is expected to boost sales realisation with a positive impact on the bottomline.
The DSP, commissioned in the sixties with British help, wants to make best of the situation.
“Our strategy of making a net profit this year is multi-pronged. We want to enhance the volume of production, improve techno-economics, stretch the capacities of existing mills and increase the finish component in our product-mix by outside conversion of our concast billets,” DSP’s managing director, Dr Subir K Bhattacharyya, told The Financial Express.
The plant operates with three furnaces, of which No 2 and No 4 were modernised in the nineties, while the very old No 1 furnace, which has a small capacity, is likely to be closed down after No 3 joins production. DSP produced 1.84mt of hot metal last fiscal, its best ever and a 3.8 per cent growth over the previous fiscal.
It has made substantial improvements in the techno-economic parameters of the blast furnaces. Furnace No 1 does not possess either good production capacity or techno-economics. Once the No 3 furnace comes up and No 1 close down, the plant’s overall production as well as techno-economics will improve.
DSP brass expect that higher annual production of over 2mt supported by better techno-economics will help the plant reduce production costs and stay competitive.
The plant will enhance production from its existing mills, convert a sizable portion of concast billets externally and set up a wire rod mill using the available resources to convert the concast billets.
The plant, which has a large percentage of semis in its product mix, has been trying hard to offset this adverse ratio.