VSP increases prices of steel products

The Visakhapatnam Steel Plant (VSP) has increased the prices of its steel products between Rs 900 and Rs 1,000 per tonne.

The move comes after the Union government enhanced the excise duty on steel from eight to 12 per cent in its recent budget and imposed a two per cent education cess on excise duty.

"With these new duty structures in place we have raised prices between Rs 900 and Rs 1,000 per tonne," Sivasagar Rao, director (commercial) of VSP, told Business Standard.

"We are passing this new duty burden to consumers. If we do not pass this burden to consumers, VSP will lose around Rs 250 crore during this year. The duty related price hike notwithstanding VSP will not hike prices this year," he said.

VSP has registered a 31 per cent growth in domestic sales during the first quarter of the current fiscal as compared to the corresponding period last year. During the April-June period, sales touched Rs1,383 crore as against Rs 1,055 crore during the corresponding period last year.

VSP steel exports though dropped 49 per cent during the same period. During the first quarter last year, VSP exported Rs 109 crore worth of steel products, but this fiscal steel exports were only Rs 56 crore.

"With realisations being better in the local markets, our domestic sales have increased. This apart, the government has reduced exports benefits and we are not concentrating on the export market like we used to do earlier. This is one of the reason why our exports have reduced significantly," Rao said.