Visa Steel suspends Kalinganagar operations as raw material supplies stop

Visa Steel said it has gone for temporary suspension of all its operating units at Kalinganagar as raw material supplies have been abruptly halted to its plant. In a notice to its employees and workers engaged in its blast furnace, sponge iron, Steel Melting Shop (SMS), rolling mill and ferro chrome units, the company said it has placed the units under suspension effective from 6 am on August 21 till further order.

The steel company in a letter to the district labour officer, Jajpur said it was constrained to suspend the industrial activities due to non-availability of necessary raw materials-iron ore and chrome ore. Visa Steel procures the two ores from state-run Odisha Mining Corporation (OMC).

"It is a deep regret to inform that the lifting and transportation of iron ore from OMC office stationed at Daitari mines to Visa Steel plant site has been stopped abruptly without any prior information in any manner. Though the transportation has been going on uninterruptedly through OMC office to other industries, it has been stopped completely to Visa Steel for no logical reasons", Manoj Kumar, director, Visa Steel said in a notice.

Lifting and transportation of chrome ore from OMC owned Kaliapani mines has also stopped. As raw material supplies to its units came to a standstill, Visa Steel could run the units for only two days with available inventory.

Local MLA Pritiranjan Ghadei alleged the transporters were not keen to carry the raw materials to the Visa Steel site due to intolerable pollution levels that were detrimental to their health. The truckers have filed a complaint last week with the local police station at Kaliapani on the problem. They have halted raw material supplies for the past three to four days.

"Earlier, the State Pollution Control Board had slapped a notice on Visa Steel. Despite this, the company has not taken adequate measures to curb pollution. Transporters are upset with the callous attitude of the company management. The company is also not doing enough CSR work. We are open to negotiations with the company as we want the plant to run smoothly in the interest of the locals", Ghadei said.

Industry stakeholders are visibly worried over local political disturbances at Kalinganagar disrupting operations and leading to a shutdown of units. The site is home to a cluster of steel units run by Tata Steel, Mesco Steel, Jindal Stainless Ltd, Visa Steel and others.

Purushottam Kandoi, president, Kalinganagar Industries Association said, "Political disturbance in steel units are acute in Kalinganagar. They have compelled closure of units one by one — Mesco is closed since December 2015. K J Ispat is closed since April 2016 and now Visa Steel has declared closure today". Kandoi has called for stringent action to curb such agitations.

Visa Steel has also approached OMC on the crisis. The company said it is lifting iron ore through road transport through the contractor — Shree Transport. Though the transportation is done by this contractor, the company alleged this is controlled by MAA Tipper Owners' Association, Bamnipal which decides deployment of tippers to different customers of OMC.

"We tried to find out the reasons from the office bearers of the association and understood from them that such act of association is at the behest of some local political leaders", said the Visa Steel director in a letter to OMC's managing director.

The company has urged OMC to resume raw material supplies at the earliest to avoid a shutdown of the blast furnace and the DRI plant.