The Steel Executive’s Federation of India (SEFI) and RINL’s Steel Executive Association have demanded that the Centre’s plan to privatise the Visakhapatnam Steel Plant (VSP) be dropped and that the RINL, Steel Authority of India Limited (SAIL), Neelanchal Ispat Nigam Limited, NMDC and Mecon under the Ministry of Steel be merged to form a huge conglomerate.
Both the bodies, at a meeting in New Delhi on Monday, passed a resolution to submit a representation to the government seeking that the steel industry be continued as a strategic sector.
“The merger of the units under a roof, the SAIL, will make the steel plants into a huge steel conglomerate with a production capacity of about 30 MPTA. With all steel plants being in the expansion mode, the total production can go up to 50 MPTA by 2030 and this would make the steel conglomerate among the biggest in the world. It would even cross the POSCO’s capacity of 40 MPTA,” said SEA vice-president K.V.D. Prasad.
Both the SEFI and the SEA members feel that the RINL’s advantages can iron out the disadvantages of the SAIL and vice-versa.
Speaking about the RINL’s advantages that can be beneficial to the SAIL and other steel plants, Marpu Sarat of the SEA said the RINL is the only shore-based integrated steel plant and its sea connectivity can be utilised by others for import and exports.
Captive mines
“Moreover, we have a very strong marketing network in south India, which can help the SAIL immensely. The RINL has got a huge land bank that can be utilised for expansion and changing the product mix, which the SAIL plants do not have,” pointed out Mr. Prasad.
He said with no captive mine, the RINL’s production cost is going up and with the merger, the mines of the SAIL and the NMDC can change the fortune of the RINL.
Product mix
As the RINL has a limited product mix, its quality has a global recognition. With the merger, the SAIL that has a huge product range can make the steel conglomerate a force to reckon with in the global market, opined Mr. Prasad.
The Centre has so far invested around ₹4,500 crore in the RINL, but the steel plant has given back over ₹45, 000 crore in the form of taxes and dividends. More essentially, wherever a PSU steel plant has come up, a city has developed. Even in the case of RINL, the per capita of Gajuwaka region is the highest in the State, he pointed out. “We urge the government to consider the from a holistic point of view,” said Mr. Prasad.
