Uncertainty dogs Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), with its turnover falling down drastically and turbulent time ahead due to the fallout of the COVID-19 crisis.
The company is faced with spiralling interest burden and losses are expected to reach alarming proportions.
Ambitious target
RINL, during just-concluded financial year, clocked a turnover of ₹15,800 crore by producing 4.98 million tonne liquid steel and around 4.46 million tonne saleable steel. The company has set an ambitious target of ₹25,000-crore turnover for 2019-20 after achieving a turnover of ₹20,844 crore during 2018-19.
Economy slowdown, prolonged sluggish conditions in the market, and impact of COVID-19 at the fag end of the fiscal cast a shadow on the performance of RINL, official sources told The Hindu.
The exact amount of losses during 2019-20 will be known after auditing. Sources say it will be the highest since RINL’s inception.
The company did well in 2018-19 by earning a net profit of ₹97 crore after incurring a net loss of ₹1,421 crore in 2015-16, ₹1,236 crore in 2016-17 and ₹1,321 crore in 2017-18.
The company recently ramped up its new units under ₹4,000-crore capital repairs of blast furnaces and modernisation to increase its production capacity from 6.3 to 7.3 million tonnes.
Capacity reduced
Due to COVID-19, it has reduced its capacity by shutting down one of the three blast furnaces to roll out 13,000 tonne to 14,000 tonne hot metal per day against the capacity of 20,000 tonne.
The Centre’s proposal to explore a joint venture with POSCO by allotting 3,000 acres of RINL land on the premises of the VSP here to set up a three million tonne Greenfield steel plant to meet the requirement of the automobile industry with an estimated investment of ₹15,000 crore is facing stiff opposition from the employees’ unions.
