Indian Alloy Steel retrenches

The loss-making Alloy Steels Plant (ASP) of Steel Authority of India Ltd (SAIL) is working out a turnaround strategy that includes cost-cutting and a reduction of headcount by 50%. The plant, at Durgapur, West Bengal, had been put up for disinvestment via a global tender last year. But it did not attract any buyers, forcing SAIL to look for a turnaround plan. The plant officials claim that ASP has shown substantial improvements in the techno-economic parameters like energy consumption, yield and productivity during the last fiscal and could cut costs by around Rs 8 crore. The cut in production costs helped ASP to secure orders despite stiff competition. However, poor demand and severe competition has acted as a dampener. ASP increased its saleable steel production by around 9% in 2001–2 over the previous fiscal, while total sales went up by 4.5%. These helped it to reduce losses to Rs 149 crore from previous fiscal’s Rs 184 crore. The plant secured orders once again to supply stainless steel slabs to Salem Steel Plant (SSP) in Tamil Nadu in the previous fiscal. It is also selling to other parties.

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