The Visakhapatnam Steel Plant (Rashtriya Ispat Nigam Limited) envisages diversification into flat products in the next phase of expansion, but as of now, the emphasis is on consolidation, said P.K Rath, Chairman and Managing Director.
In an interview to The Hindu, Mr. Rath said here on Saturday that the capacity of the steel plant had been enhanced from the original three million tonnes to 6.3 million tonnes, and with modernisation of the units, another million tonnes would be added, taking the total to 7.3 million tonnes.
“Almost all the units in the expansion phase are ready and functioning, barring one. That would also be ready soon. Our first objective is to consolidate and stabilise the production at 7.3 million tonnes and then the next phase of expansion will be taken up,” Mr. Rath explained.
In the next phase, four more million tonnes would be added. “So far, we have only produced long products and in the next phase, we want to diversify into flats as well. It will enable us to make greater inroads into the market,” he said.
About iron ore linkage, Mr. Rath said that for a production level of 7.3 million tonnes, roughly 10 million tonnes of ore would be required which would be provided by NMDC. “We are making efforts to get ore from Odisha for the next phase through Orissa Minerals Development Company (OMDC). We have been making efforts for a long time to get captive iron ore mines. The lack of captive mines is costing us dear and affecting our bottom line. The production cost goes up substantially, as we have to buy ore at ₹3,000 more per tonne. Still, we are running the plant very efficiently on all techno-economic parameters and staying competitive,” Mr. Rath said.
Sluggish phase
The CMD said that the market was going through a sluggish phase, but added that he is hopeful that it would soon improve as the government had announced a number of infrastructure projects. “Last year, we achieved a turnover of over ₹20,000 crore and we plan to achieve ₹25,000 crore this year,” Mr. Rath said.
He said the plant was also focusing on producing value-added, high-end steel. Last year, the plant produced one million tonnes of such steel and it would go up to 1.3 million tonnes or so.
Kadapa plant
In response to a question on the proposed Kadapa steel plant in Andhra Pradesh, Mr. Rath said, “Constructing a steel plant is not the issue. Securing iron ore linkage and enough water for the plant are the main challenges. Then, the plant has to be run efficiently. We passed through all those phases here. Right from construction stage, I personally witnessed it all, as I have worked for more than 35 years of my career here.”