ASP incurred a net loss of Rs 179 crore on a turnover of Rs 283 crore in 1998-99 fiscal and the US consultant McKinsey & Co recommended its closure. This sent ripples through the trade union circles and the industry as well.

Among those who attended the meeting were SAIL chairman Arvind Pande, Durgapur Steel Plant managing director SB Singh, Research & Development Centre for Iron & Steel (RDCIS) director SK Bhattacharya, ASP executive director RL Sharma and SAIL corporate office executive director for personnel and administration T Tiwari. RDCIS director SK Bhattacharya is alsoheading a committee which is looking into the various aspects of ASP's viability and suggest remedial measures.

Among the trade union representatives in the meeting were Citu general secretary MK Pandhe, Rajya Sabha MP Jibon Roy, Ardhendu Dakshi, Intuc's Bikash Ghatak, Madan Sarkar and others. They suggested various solutions which can be classified under three broad heads: the survival plan, the viability plan and a long-term growth plan. Pandhe suggested that steps should be taken to make alloy steel manufacturing a profitable proposition within SAIL.

The SAIL management has agreed to look into the trade union proposals and do whatever is possible for the viability of ASP.

Arvind Pande made it clear to the trade union representatives that SAIL board had not accepted the McKinsey recommendation for closure of ASP and said "that is why we are trying to find a way to make ASP viable."

"We are open to the suggestions made by the trade unions," he said. He emphasised, "panic is not what we want tocreate. It is a difficult situation, particularly for the alloy steel industry and crisis often throws up best results."

ASP is trying to convert the Rs 106 crore negative gross margin of 1998-99 to a positive gross margin of Rs 9 crore in the current fiscal. Commissioned in 1965 with technology and expertise from Canada and Japan, ASP was the first special steels plant under the erstwhile Hindustan Steel.

ASP has traditionally been a profit-making plant with a highly skilled workforce. It produces a range of over 200 varieties of special steels that are used in critical sectors of industry and defence services. When Salem Steel Plant in Tamil Nadu was commissioned in 1981 with modern Sendzimir mill, it started using stainless steel slabs from ASP. This arrangement underwent changes, but continued till ASP was priced out of the stainless steel market.

Moreover, obsolete technologies and high manpower cost also pushed ASP to the walls. In 1998-99 fiscal, the manpower cost as percentage of sales was veryhigh at 36 per cent in ASP against SAIL's average of 16 per cent. From a high manpower of 7,400 in 1993-94, it was brought down to 5,500 in March 1999. Response to the present VRS, valid up to January 31, 2000, is good in ASP, and the efforts are on to bring down manpower to around 4,000.

In recent times there has been a proposal for merging ASP with DSP. Although a decision on the same was not taken, close linkages between the two are being developed. At present, ASP is getting hot metal from DSP and this has reduced the cost of production. It has started manufacturing bullet-proof vehicle as per design of the defence services and production of ferro alloys is also under consideration.