Steel minister Birender Singh wants sweeping changes in the way steel PSUs — SAIL and RINL — function so that they could return to profitability and catch up with their private-sector peers. Diversification of the product mix with more value-added items, changes in the tendering system and honing the leadership are on top of the minister’s to-do list for the PSUs that have been incurring losses in the recent quarters.
The domestic steel industry had been passing through a great turmoil for the past two years as a result of subdued demand and burgeoning predatory imports, though things have changed for the better with the imposition of a series of traiff and non-tariff measures since February last year. However, while the private sector has been able to come out of the turmoil, SAIL and RINL have been incurring net losses after losses, though their finacials have improved a bit recently.
“The domestic industry is certainly out of the woods now. Private players have made much headway in the present scenario and I should say PSUs have also tightened their belt to a great extent. I found that SAIL has made cash profit also in the last quarter. There is improvement in the case of RINL also. But a lot is to be done,” Singh told FE in an interview.
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The minister said a committee has been constituted a month back under the chairmanship of the steel secretary to review the functioning of the two PSUs and what steps should be taken to imrove their efficiency levels. He said SAIL itself has engaged an outside agency to find out how it can come out of the prevailing situation. At the same time, he felt both the firms should focus on value-addition.
“There are so many factors. Of course, leadership issue is also there,” he said, adding that though the plants were old, the leadership should not take so much time to ramp up capacity through modernisation and expansion.