Due diligence for Rourkela Steel Plant fertiliser unit completed

Rourkela, Jan 2: The due diligence for hiving off the fertiliser plant of the SAIL’s Rourkela Steel Plant was completed even as the plant now focuses on producing value-added products.

The two companies including public sector Rastriya Chemicals and Fertiliser had shown interests in the fertiliser plant. “Now they have to submit their bids for the fertiliser plant,” executive director in-charge of RSP Sanak Mishra told here.

He said that IDBI was engaged as the merchant banker and evaluation would be made after the submission of the bids.

Hiving off the fertiliser plant was part of the SAIL’s restructuring plan.
He said that the asset restructuring would help RSP, Aflat product plant, passing through a critical period since its massive modernisation programme involving Rs 4,200 crore.

The 1.5 million tonne plant had incurred a loss of Rs 445 crore in 2000-01.

Mishra said that currently all the flat products plants were affected due to the depressed market condition.

He said the country had now an installed capacity of 29 mt while the current consumption was around 26 mt. The three mt surplus capacity was in the flat sector, he added.

Consumption of flat products especially in the white goods and auto sector was far below expectations, he said adding all the new players like Jindal, Essar, Ispat and even Tatas had set up their capacity in the flats.

Mishra said in the last six years, certain factors had adversely affected the plant’s bottomline. In the current financial year, the sale price per tonne of hot rolled coils had slumped by around 20 per cent to 30 per cent.

The other factors affecting RSP’s financial performance were the extra burden of high interest and depreciation arising from the massive investments in update programme, voluntary retirement scheme implementation, the higher wage bill due to revision in pay scales and substantial increase in the prices of vital inputs like coal and iron ore.

Mishra said that if the market continued to behave this way for some more time, “some of the flat products plants would have to sit down.”
He, however, expressed confidence of overcoming the present crisis saying that the SAIL brand, its inherent strength and untapped potential, would certainly help the plant.

— PTI