DSP expects profit following best-ever H1 production

Sunil Mukhopadhyay

Kolkata, Oct 8: Durgapur Steel Plant (DSP) may earn a marginal net profit this fiscal, after almost a decade, if the upward production trend picks up to more than 10 per cent of the rated capacity in the remaining months.

DSP, a Steel Authority of India Ltd integrated steel plant located in Bardwan district of West Bengal, earned net profit for the last time in 1992-93 fiscal.

The plant ended the first half with significant growth rates in all the major areas. The saleable steel production at 7,52,161 tonne was about 7 per cent more than the previous year’s figure of 7,03,332 tonne. Similarly, the production of crude steel and hot metal at 8,27,094 tonne and 9,15,829 tonne respectively was 8.7 per cent and 7.6 per cent respectively more than the previous years best ever figures. But, the units which have helped DSP tide over the difficulties of the domestic sluggish market are its continuous casting plant (CCP) and merchant mill. Sources indicated that with the state of the art CCP, acquired by DSP during the recent modernisation, performing at beyond rated capacity for about two years consistently, the plant has been able to sell its semis to survive the downturn. “Our CCP produces mostly ten-centemeter square section billets, which sell like hot cakes in the domestic market,” a senior DSP official said.

Plant sources indicate that one cannot discount the possibility of DSP’s CC billets competing with DSP’s merchant and section products after rolling into rods and structurals by re-rollers. However, DSP’s superior quality of sections and merchant rods have carved a niche in the domestic market, the official claimed.

DSP has now set the target of 1 million tonne (mt) of billet production in the current fiscal, which is around 25 per cent more than the rated capacity of its CCP. DSP’s merchant mill, the producer of the premier quality TMT bars, has also been producing at more than the rated capacity in the recent past.

Plant sources were, however, skeptical of orders from the Railways in the remaining two quarters of the current fiscal as the railways are saddled with plenty of broad guaage and loco wheel stocks. “We are hopeful that besides increase in the volume of production, the prices of long products may notice an uptrend, helping the plant in posting higher margins in the remaining part of the current fiscal,” the official said.