Keen to take the two steel PSUs — SAIL and RINL — out of the woods, the steel ministry has appointed retired executives with vast domain knowledge about the units of the PSUs to prepare a plan for revival.
Keen to take the two steel PSUs — SAIL and RINL — out of the woods, the steel ministry has appointed retired executives with vast domain knowledge about the units of the PSUs to prepare a plan for revival. Each expert will closely monitor the workings of SAIL’s five integrated units and RINL’s Vizag unit and devise step-wise action plans to plug the loopholes. “Steel minister Birender Singh has formed a committee chaired by secretary of steel for the revival of SAIL and RINL. The committee has nominated industry veterans, known for their expertise in the steel sector, for SAIL and RINL plants to monitor the workings of the units and suggest step-wise solutions to help nurse them back to health,” steel secretary Aruna Sharma told FE.
Individual experts, mostly retired officials from SAIL and Tata Steel, have no fixed tenure. They will continue to provide expertise as long as the steel ministry wants them to. They will be given an honorarium. The steel secretary did not reveal their identity. However, sources said while BK Singh, an advisor to SAIL, has been asked to prepare the revival plan for RINL’s lone Vizag plant; RP Singh, former advisor to SAIL, BN Singh, former RINL CMD, and Tridibesh Mukherjee, former Tata Steel deputy MD, have been given the mandate for SAIL’s plants.
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“These experts have started working. We have had a meeting with them. I must thank them. They are stalwarts in the field, but they are actually going to the plants and advising the units how to work properly,” Sharma said. While depressed steel prices have hurt domestic steel firms, the government has taken a series of tariff and non-tariff measures to protect the domestic industry from the onslaught of imports. Recently, it has firmed up a policy that will make mandatory sourcing of domestically produced steel for government tenders. But, the two PSUs still lagged behind while their private sector peers took advantage of the steps and returned to profits.
In a recent interview with FE, Singh said he wanted sweeping changes in the way SAIL and RINL functions so that they could return to profitability and catch up with their private sector peers. SAIL has been in losses for the last eight quarters. It is also likely to remain in the red for the entire current fiscal. RINL incurred a loss of Rs1,421 crore in 2015-16. Though it remained in the red, RINL’s turnover grew by 4% to Rs12,781 crore in 2016-17 over Rs12,281 crore in 2015-16. Sharma said the steel ministry is also setting independent targets for each units.
“The terms of reference of the committee will include chalking out a revival plan for turning around loss-making PSUs of Ministry of Steel, to profit-making PSUs in 2017-18. The plan will focus on increasing production, sales and improving financial health of these PSUs,” reads the steel ministry directive for committee, headed by Sharma. The revival plan will include recommendations on bringing down cost of production, improving branding and marketing, value-addition and diversification for better margins, among others.