The Hindu : Vizag Steel's expansion

Online edition of India's National Newspaper
Friday, Oct 10, 2003

Business

Business

Vizag Steel's expansion

By Our Special correspondent

HYDERABAD OCT. 9. Buoyed by a jump in net profit in the first half, which enabled it to clear off outstanding loans and become a "zero debt'' company, Visakhapatnam Steep Plant (VSP or Rashtriya Ispat Nigan Ltd.), is working on an "expansion'' plan which it hopes to submit to the Government of India for approval in two months.

Addressing a press conference here to share the company's "sterling performance,'' B. K. Panda, Chairman and Managing Director, said the company expected to achieve a net profit of over Rs. 400 crores (provisional) for the first half of 2003-2004, a six fold increase over the corresponding period of previous year when the net profit was Rs.74 crores. The net profit includes Rs.150 crores towards extra realisation on account of the rising steel prices.

Mr. Panda was confident that the second half performance would be even better as production would improve further and prices also might be better. "Steel prices are still not high compared to world market,'' he said adding they could rise or firm up. He pointed to predictions that 2004 would record highest steel prices and there could be metal and coke shortage. Even the current prices were the highest since 1973-74, he said.

For the first half, the company has recorded a turnover of Rs. 2,553 crores (Rs. 2,031 crores), reflecting a 26 per cent growth. Exports were Rs. 316 crores (Rs. 265 crores). It had outstanding loans of Rs. 773 crores as of March 2003.The CMD said the company was now making Rs.100 crore surplus every month. The VSP however had an accumulated loss of Rs. 4,500 crores and Mr. Panda was confident of wiping out this also in the next four yearsSounding upbeat on VSP's future, Mr. Panda said they were working on making "VSP the best steel plant in India and one of the good ones by global standards.''

While declining to reveal the exact expansion plans, he said its present rated capacity was 3.5 million tonnes hot metal, and this could be taken immediately to five million tonnes and ultimately to ten million tonnes. The plant was now operating at 17 to 18 per cent more than rated capacity.

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