DURGAPUR: The Durgapur Steel Plant (DSP), the sickest unit of the public sector major Steel Authority of India Limited (SAIL) in the 1970s owing to turbulent times and obsolete technology, has finally come of age.

From the dismal position of earning a negative net margin of Rs. 247 crore in 2002-03 to raking in a net profit of Rs. 784 crore in 2004-05 has been a long story which speaks of grit and perseverance. The DSP is now looking up to the future with a new zeal and is preparing itself to face the competition, both at home and abroad, head on.

Turnaround story

Narrating the turnaround story to a group of visiting newspersons from Delhi, the Director (Personnel) and acting Managing Director of DSP, S. K. Roongta, said modernisation of the 1.6 million plant was taken up in 1989 and its main production units were progressively commissioned during 1992-96 to raise its hot metal capacity to slightly over two million tonnes, a crude steel capacity of 1.80 million tonnes and a salable steel capacity of 1.59 million tonnes.

The new technologies introduced during that phase of modernisation, Mr Roongta said, included reconstruction of blast furnaces, continuous casting of billets, hydraulic press for the wheels plant as also slit rolling and thermax cooling for bars in the merchant mill. To keep pace with the competition, another phase of modernisation was on to increase the installed capacity further and graduate to the production of more value added products in keeping with the steel major's overall corporate plan to be completed by 2011-12, he said.

At present, DSP produces bars and rods as also medium structurals for the construction and fabrication industry, and wheels and axles for the Indian Railways. These apart, it produces skelps for tube manufacturing units and semis for the re-rolling units. As a result, its product-mix has a high semis production at 54 per cent, which militates against the efficiency of the integrated plants.

Cost savings

Efforts, therefore, were under way to switch over to production of branded products in a phased manner, Mr. Roongta said. To start with, three out of the four blast furnaces had been completely refurbished, while modernisation of the fourth blast furnace would be taken up shortly. To divert raw steel from the production of ingots and semis, DSP was setting up a bloom caster at a cost of Rs. 270 crore and it would be ready for operation shortly. Within three years, the savings of Rs. 1,200 a tonne through the production of blooms would pay off the investment cost, Mr. Roongta said.

With a view to increasing the extent of value addition in its product-mix to about 97 per cent, DSP is poised to carry out another phase of modernisation, involving an investment of Rs. 2,800 crore.

Apart from the bloom caster, there would be two bar and rod mills set up at a cost of Rs. 900 crore.

Thus, by 2011-12, DSP envisaged to have a capacity of 3.2 million tonnes of hot metal, three million tonnes of crude steel and 2.84 tonnes of salable steel. Likewise, the wheel and axle plant, which now supplies 80,000 coach and loco wheels and 10,000 axles to the Railways as a captive buyer, would have a much higher capacity to produce 1.2 lakh wheels, Mr. Roongta said.

However, like all PSUs, the bane of DSP was the huge manpower, which now stood at over 15,000. Although there had been a reduction of over 6,000 through the voluntary retirement scheme and natural superannuation, the objective was to bring it down to about 9,000, in keeping with the modern production trends, Mr. Roongta said.

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