The Hindu : Business : Former SAIL laggards reap profit bonanza

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Friday, Feb 11, 2005

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Business

Former SAIL laggards reap profit bonanza

By Indrani Dutta

KOLKATA, FEB. 10. Two of the biggest headaches of India's largest steel producer, the Steel Authority of India Ltd (SAIL), have turned in an aggregate net profit of Rs. 1,029 crores in the first three quarters, accounting for one fourth of the total net profit earned by the public sector undertaking major so far this fiscal.

SAIL which recently announced its first ever maiden dividend has a Government holding of 85.82 per cent with the balance being dispersed among its over 2.5 lakh shareholders.

Sources said that while the Durgapur Steel Plant (DSP) in West Bengal which was deep into the red and was a centre of militant trade unionism, reported a net profit of Rs. 475 crores in the first three quarters of 2004-05, its neighbour Rourkela Steel Plant (RSP), located in Orissa, made its first net profit since inception, in the first quarter of this fiscal and has sustained the upward swing since then. It ended the three quarters with a net profit of Rs. 554 crores.

The Managing Director of RSP, Sanak Mishra, attributed the improved performance to the upbeat steel market as a whole, but said that high level of employee motivation achieved through mass scale contact programmes had helped, as had improvements in techno-economic parameters. RSP's turnover stood at Rs. 1,231 crores in the third quarter.

The DSP reported a Rs. 82 crore net profit in the first quarter of this fiscal, its highest since inception. It now finds itself on the road to sustainable profitability. Plant managing director, Subir Bhattacharyya, said that several new schemes were being implemented to further boost profitability.

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