Financial Daily from THE HINDU group of publications
Saturday, May 29, 2004
We will grow faster than any other steel co: SAIL chief
Mr V. S. Jain, Chairman, SAIL, addressing a press conference in the Capital on Friday. Ramesh Sharma
New Delhi , May 28
WITH all accumulated losses getting wiped out, Steel Authority of India Limited (SAIL) now plans to step up investments to become a 20 million tonne steel producer in the next seven years.
"We will grow faster than any other steel producer in the country. We will take our production from 12.5 million tonnes now to 20 million tonnes by 2011-12," SAIL Chairman, Mr V.S. Jain, told reporters while announcing "highly encouraging" annual results.
Mr Jain expects the total annual domestic requirement of steel to reach 55-60 million tonnes by 2012. At that level, there would be a gap of nearly 25 million tonnes.
"We have sold 7 per cent more steel in 2003-04. This year too, I expect the demand to grow at least 6.5 per cent at the most conservative level. In fact, the demand for steel has always outstripped the GDP (Gross Domestic Product) growth rate," Mr Jain said.
SAIL produced 11 million tonnes of saleable steel during the recently concluded fiscal, up 6.5 per cent. The four main steel plants at Bhilai, Bokaro, Durgapur and Rourkela operated at an average capacity utilisation level of 104 per cent and together produced 10.7 million tonnes of saleable steel. The company sold 10.7 million tonnes of steel, up 7 per cent over the previous year's 10.03 mt.
A surge in demand for steel within the country during the second half of the last fiscal boosted the company's domestic sales of saleable steel to a record 9.5 million tonnes. Exports of mild steel too grew by 34 per cent to 1.14 million tonnes.
However, towards the later part of the year, exports were curtailed to meet the increasing demand for steel in the domestic market. "We will continue to honour all international contracts, but would like to focus on the domestic market," the Chairman said.
More than 5,500 employees separated from the rolls of SAIL through voluntary and natural retirements during last fiscal, bringing the company's workforce down to 1,31,910 as on March 31 this year.
Enthused by the success of last year's voluntary retirement scheme (VRS), SAIL plans to further reduce its workforce by another 5,000 in the current year. The reduction of workforce would be through a mix of natural attrition and voluntary separation, bringing down the total number of employees on the company's rolls to about 1,26,000.
The reduction of manpower would also help SAIL to bring down staff costs and retire unproductive workers. Last year SAIL spent around five lakh per employee aggregating to Rs 1,000 crore on the separation scheme.
Since 1998, when the steel giant went into losses and embarked on a manpower rationalisation drive, it has been able to bring down its staff strength by 45,000.
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