Steel Authority of India Ltd (SAIL) has decided to explore overseas markets for selling railway wheels with the Indian Railways yet to place any orders with it.
SAIL officials said if the railways planned to acquire majority of its proposed number of wagons from Braithwaite and Burn Standard, then Durgapur Steel Plant (DSP), SAIL?s only unit making railway wheels, would have to wait till the process is completed. ?But whenever the railways asks for wheels, we will be in a position to supply them. DSP has so far exported railway wheels to Malaysia,? V Shaymsundar, managing director of Durgapur Steel Plant (DSP) said. He, however, did not divulge figures.
He said the unit?s railway wheel making facility is running below capacity, while the entire plant runs above the rated capacity of 1.6 million tonne. Capacity of a steel plant is measured by the amount of crude steel, it produces and DSP produced 1.786 mt of crude steel in 2008-09. Shyamsundar said: ?DSP has the capacity to produce 85,000 wheels a year but the plant could not make optimal use of its capacity.? DSP produced 67,000 wheels last year. Officials said running at low capacity incurs higher cost of production due to non-application of economies of scale. This prompted SAIL board to explore the overseas market so as to enable its wheel-making unit to run at full capacity.
The railway ministry has plans to acquire 18,000 new coaches in 2009-2010 and proposed to take over the wagon making units of Burn Standard Company Ltd and Braithwaite & Co Ltd, currently under the ministry of heavy industries. While Braithwaite registered a net profit of Rs 1.42 crore in 2008-09, Burn Standard registered a loss of Rs 199.92 crore in the same year.