RINL springs into positive territory: CMD
Rashtriya Ispat Nigam Ltd, the corporate entity of Vizag Steel Plant, has bounced back into positive territory, after two challenging years.
The efforts of RINL chairman and managing director Mr P Madhusudan to pull back the steel behemoth from out of the red have paid off, with the company set to make a profit this fiscal.
Mr Madhusudan said the steel major is likely to ring in at least Rs. 100 crores as operational profit. He admitted that the last two years have been challenging during to market slowdown, slump in demand and ballooning prices of raw materials.
“We expect to achieve break-even and a nominal operational profit of Rs. 100 crores or so by the end of the current fiscal. We also expect to bring down the net losses from about Rs. 1400 crores to Rs. 900 crores,” he said.
Mr Madhusudan said that the State had agreed to allocate iron ore mines in West Godavari district and that a Joint Venture agreement would be signed between RINL and APMDC.
This could not have come at a better time, as the company received a major allocation in the Union Budget 2018.
The RINL will spend around ‘2,800 crore on the ongoing construction works of the Coke Oven Battery-5 and the works of Kanithi Balancing Reservoir-2 (the first phase was taken up with ‘500 cr) along with the expenditure on expansion and modernisation works.
It expects to complete the modernisation programme by 2018-19, which will add one million tonne capacity to its existing 6.3 million tonnes.
“We are spending about Rs 4,000 crore for the modernisation of two rolling mills, one blast furnace and other units,” he said.
Last year, the steel maker wrapped up its Rs 12,300 crore expansion, which increased its capacity to 6.3 million tonnes. Last year it produced 5.4 million tonnes of saleable steel, as some of the units being refurbished had to be shut down.
RINL will also be diversifying into new areas to enlarge its basket of offerings. It is setting up a Rs 1600 forged wheel plant in Rae Bareli district of Uttar Pradesh—these wheels are used in high-speed railway locos and coaches.
The plant will have a capacity to produce one lakh wheels per annum. The Indian Railways has committed to pick up 80,000 wheels progressively.
The plant is expected to be ready by September 2018 and full-fledged commercial production would start from April 2019. RINL will supply the input of 330mm-450 mm Rounds from its new caster unit to the plant.
In another diversification move, the steel producer is setting up a Rs 350 crore transmission line tower manufacturing unit through a 50:50 joint venture with Power Grid Corporation of India Ltd. The unit, with an annual capacity of 1.20 lakh tonnes, is expected to be ready by 2018-19.