 "Bokaro Steel in a campaign to rid itself of legacy burden")
The travails of Bokaro Steel Plant, with its capacity dedicated to flat products, have much to do with a maintenance backlog, logistical challenges of transporting large quantities of coke and sintered iron ore from multiple sources and an industry-unfriendly external environment. The historical legacy standing in the way of Bokaro living up to its promise principally includes a lack of attention to keeping all the eight coke oven batteries in shape and building a new sinter plant. Such infirmities are forcing Bokaro to depend on external sources, including other Steel Authority of India Limited (SAIL) mills, for making good the shortfall in its own production of coke and sinter, two critical steelmaking inputs.
Chief Executive Anutosh Maitra said the plant had to "outsource" 870,000 tonnes of coke in 2012-13. At its current capacity, annual coke requirements are estimated at 2.4 million tonnes (mt). The mill's import dependence would continue till the laid-off coke oven batteries are brought to life. The urgency of battery rehabilitation is underlined by the fact that not only does the cost of coke rise when supplies come from outside, but material is lost, too, as fines are generated in long-distance hauling. To the extent coke is not produced in-house, gas generation is denied, creating energy holes.
What adds to the woes is a reliance on supplies of sinter and pellets for making, in industry parlance, the "ideal prepared burden" for blast furnace. When profits fell from Rs 703.43 crore in 2011-12 to Rs 307.5 crore last year, the mill had to haul 650,000 tonnes of sintered ore from outside. This happened when poor demand pulled down steel prices across the globe, leaving little or no margins for producers. In fact, the loss of Rs 54 crore in the first quarter of 2013-14 was not least due to the legacy burden.
Maitra, appointed chief executive in April last year, has his task cut out - ridding Bokaro of burdensome legacies, including work ethos not in line with the times. Only then would the mill, built over a 32,000 acres as the mirror image of a Russian Severstal steel plant, be able to realise its potential.
For whatever reasons, in the current phase of SAIL's modernisation and expansion, its allocation towards Bokaro has been a modest Rs 6,325 crore. However, SAIL would end spending Rs 72,000 crore to lift its hot metal production in phases from 14.3 mt in 2012-13 to 23.5 mt. At Bokaro, capacity is to rise modestly to 5.77 mt from 4.58 mt, owing to major repairs of blast furnace-I, to be over by March 2015. More important, the use of the modernisation budget would provide a major push to value addition by the SAIL unit in Jharkhand, as it is finally set to commission the third cold rolling mill (CRM) in December 2013. The new 1.2 mt CRM supplied by Siemens Vai would allow endless rolling of coils at the "highest degree of cleanliness and low-energy use." Some varieties of coils to be made in the mill would be ideal for use in certain automobile segments. The mill's galvanising line is designed to double the amount of zinc on the sheet side to be exposed to nature. Bokaro expects its new CR galvanised sheet to be a hit.
Despite constraints, Bokaro's belt-tightening resulted in the coke rate rising to 509 kg/tonne of hot metal in 2012-13 from 516 kg in 2011-12. At that time, Maitra had been at Bokaro for about a year. Despite having to deal with multiple unions, he steered the mill to achieving a productivity rate of 321 tonnes of crude steel a man year in 2012-13, much higher than SAIL's average. Over the years, there has been a disconnect between the mill and many of its once loyal customers. That Maitra, in a marketing drive, is meeting big and medium customers to ensure they start buying more steel from his mill is good for Bokaro. This has started paying, as bigger order flows from pipe makers Jindal Industries and Avon Cycles show.
Chief Executive Anutosh Maitra said the plant had to "outsource" 870,000 tonnes of coke in 2012-13. At its current capacity, annual coke requirements are estimated at 2.4 million tonnes (mt). The mill's import dependence would continue till the laid-off coke oven batteries are brought to life. The urgency of battery rehabilitation is underlined by the fact that not only does the cost of coke rise when supplies come from outside, but material is lost, too, as fines are generated in long-distance hauling. To the extent coke is not produced in-house, gas generation is denied, creating energy holes.
What adds to the woes is a reliance on supplies of sinter and pellets for making, in industry parlance, the "ideal prepared burden" for blast furnace. When profits fell from Rs 703.43 crore in 2011-12 to Rs 307.5 crore last year, the mill had to haul 650,000 tonnes of sintered ore from outside. This happened when poor demand pulled down steel prices across the globe, leaving little or no margins for producers. In fact, the loss of Rs 54 crore in the first quarter of 2013-14 was not least due to the legacy burden.
Maitra, appointed chief executive in April last year, has his task cut out - ridding Bokaro of burdensome legacies, including work ethos not in line with the times. Only then would the mill, built over a 32,000 acres as the mirror image of a Russian Severstal steel plant, be able to realise its potential.
For whatever reasons, in the current phase of SAIL's modernisation and expansion, its allocation towards Bokaro has been a modest Rs 6,325 crore. However, SAIL would end spending Rs 72,000 crore to lift its hot metal production in phases from 14.3 mt in 2012-13 to 23.5 mt. At Bokaro, capacity is to rise modestly to 5.77 mt from 4.58 mt, owing to major repairs of blast furnace-I, to be over by March 2015. More important, the use of the modernisation budget would provide a major push to value addition by the SAIL unit in Jharkhand, as it is finally set to commission the third cold rolling mill (CRM) in December 2013. The new 1.2 mt CRM supplied by Siemens Vai would allow endless rolling of coils at the "highest degree of cleanliness and low-energy use." Some varieties of coils to be made in the mill would be ideal for use in certain automobile segments. The mill's galvanising line is designed to double the amount of zinc on the sheet side to be exposed to nature. Bokaro expects its new CR galvanised sheet to be a hit.
Despite constraints, Bokaro's belt-tightening resulted in the coke rate rising to 509 kg/tonne of hot metal in 2012-13 from 516 kg in 2011-12. At that time, Maitra had been at Bokaro for about a year. Despite having to deal with multiple unions, he steered the mill to achieving a productivity rate of 321 tonnes of crude steel a man year in 2012-13, much higher than SAIL's average. Over the years, there has been a disconnect between the mill and many of its once loyal customers. That Maitra, in a marketing drive, is meeting big and medium customers to ensure they start buying more steel from his mill is good for Bokaro. This has started paying, as bigger order flows from pipe makers Jindal Industries and Avon Cycles show.