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RSP's new mantra to achieve 100% capacity utilisation

Kohinoor Mandal

Kolkata , Oct. 15

REGISTER 100 per cent capacity utilisation during the month and earn Rs 100 more at the end of it.

This is the mantra that has pepped up 19,000 employees out of the total workforce of 24,000 at Rourkela Steel Plant (RSP) to produce more and pull the plant out of the red.

RSP is the only plant within Steel Authority of India Ltd (SAIL) to operate at less than 100 per cent capacity utilisation. All others are currently operating well above that mark. RSP's total capacity for liquid steel production is two million tonnes, but it is currently producing only 1.7 million tonnes and hopes to end 2003-04 with 1.8 million tonnes.

"To come out of the red, we need to increase our hot metal production. It will help us to produce more of saleable steel. With a 100 per cent capacity utilisation RSP will reduce its production cost by 7-8 per cent," sources told Business Line.

Hence, to motivate the employees, Dr Sanak Misra, Managing Director of RSP, has introduced an innovative incentive scheme called 100 Per Cent Plus. Under this scheme, if a unit registers 100 per cent capacity utilisation then all those attached to it will earn an additional Rs 100.

The scheme was introduced in July this year, over and above the two existing SAIL schemes. One of these is an incentive based on installed capacity utilisation and the other is a reward scheme based on the annual performance plan. These schemes are operational in other SAIL plants too.

Sources said that in the first half of 2003-04, RSP registered a cash profit of Rs 30 crore; it is expecting to register net profits from December this year, immediately after completion of several capital repairs in November.

"However, it will not be enough to record a net profit for the whole of 2003-04. To achieve that RSP will have to increase its capacity utilisation. Liquid production must reach the 1.8 million tonnes per annum mark," sources said.

It may be noted that after seven consecutive years, RSP was successful in recording a cash profit of Rs 30 crore in the last quarter of 2002-03 mostly due to the firming up of global steel prices.

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