Financial Daily from THE HINDU group of publications
Wednesday, Aug 11, 2004
Durgapur Steel Plant Q1 profit at all-time high SAIL to make Rs 271-cr fresh investments
Kolkata , Aug. 10
DURGAPUR Steel Plant (DSP), one of the four integrated steel plants of Steel Authority of India Ltd (SAIL), has, in the first quarter of this fiscal, posted its highest net profit ever for any accounting period in its 44 year history.
The unit has registered a net profit of Rs 82 crore, marginally higher than the 2003-04 profit of Rs 81 crore.
DSP recorded a turnover of Rs 735.54 crore during the last quarter compared with Rs 697 crore in the corresponding quarter of 2003-04. Net profit in that quarter was Rs 7 crore.
Sources in DSP said that the plant could have registered an even higher net profit had its operations not been affected by shortage of coking coal, which SAIL imports mostly from Australia.
"In fact, we might have doubled our net profit if we had regular supplies of coking coal. Like other steel plants, we were also forced to curtail our production and look for alternative means. This had left a mark on the plant's bottomline," the sources said.
It may be noted that DSP started registering profits in the last financial year after two decades of losses. Prior to 2003-04, the plant last registered a net profit of Rs 4.52 crore in 1981-82.
Meanwhile, SAIL has worked out fresh investment plans of around Rs 271 crore for DSP. The plant is installing a reheating furnace and ladle furnace. "The new facilities will make DSP to convert fully to the continuous casting route while bringing in substantial savings in cost of production," the sources said.
However, these facilities will not make much difference to the existing product-mix of DSP. Sources added that DSP is planning to upgrade the plant's section mill to improve its productivity and install a wire rod mill too.
A senior plant official said DSP was laying stress on value-added products. It was also trying to reduce its production cost. DSP's special steel production in the first quarter of 2004-05 was 69,800 tonnes against 33,000 tonnes in the last fiscal.
In an effort to reduce the plant's dependence on imported coking coal, DSP was planning to inject tar in Blast Furnace 2. Coal dust may be injected in Blast Furnaces 3 and 4.
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