The Hindu : VSP's cost-cutting steps paying dividends

Online edition of India's National Newspaper
Friday, Jan 23, 2004

Andhra Pradesh

Andhra Pradesh - Visakhapatnam

VSP's cost-cutting steps paying dividends

By Shakeel M. Rasheed

VISAKHAPATNAM: A sustained strategy over the past five years at containing the cost of production by the Visakhapatnam Steel Plant (VSP) is continuing to bring in dividends. According to PSU sources, the VSP is poised to improve further its performance on this front during the current fiscal, having already effected a saving of Rs.90 crores for the first six months of 2003-04.

In the very first year of the initiative in 1998-99, the cost-saving measures raked in Rs.44 crores, the figure rising substantially to Rs.118 crores in 1999-2000, Rs.175 crores in 2000-01, Rs.186 crores in 2001-02 and Rs.209 crores in the last fiscal.

The sources point out that production, marketing and techno-economic parameters of performance apart, the company has recognised the need to bring down the cost of production on a continuous basis notwithstanding the increase in input prices.

"While there has been a steady reduction in areas like specific energy consumption, coke rate and specific refractory consumption, yields and productivity levels have been marked by perceptible improvements,'' they say.

The major initiative in the drive to bring down the cost of production involved reducing the consumption of raw material for producing one tonne of saleable steel. "The plant used to consume 2.99 tonnes of raw material to produce one tonne of saleable steel during 1998-99, and the cost saving efforts have helped it bring down to 2.81 tonnes. This resulted in reduction of production cost to a great extent,'' the sources aver.

Further saving is being realised by reducing the refractory consumption by improving the converter lining life and steel ladle life and the use of lime consumption in the sinter plant; reduction in coke rate; consumption of power, water, oxygen, nitrogen and airblast at different shops; and increased application of nut coke in place of blast furnace coke at the blast furnace and coke dust in place of coke breeze in the sinter plant.

The plant has also benefited from recovery of useful material from waste/dumps like iron, copper and steel scrap for application in steel making and salvaging used silica bricks and other refractory bricks for reuse in the blast furnace and steel melt shop. Recycling of material like LD slag at the blast furnace and sinter plant and metallurgical waste at the sinter plant to partially replace stone, iron ore fines and tar/benzol sludge in the sinter plant and coke ovens have added to the saving.

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