Steel Authority of India, the country's leading steel producer, has been operating at negative margins for most of its value-added products in 1997-98.
While the public sector steel major has had a positive net margin in products categories like pig iron, hot rolled coils, HR plates, HR sheets, rails, heavy structurals, plates, rounds, TMBP coils and SAW pipes, the PSU has been losing money in its semis, wire rods, skelp, wheels, axles, CR coils, CR sheets, ERW pipes, thick plates and CRNO and CRGO operations.
The four SAIL units i.e., Bhilai, Durgapur, Rourkela, and Bokaro, on an average were losing Rs 221 per tonne of semis produced, Rs 277 per tonne in wire rods, Rs 1,815 per tonne in skelp, Rs 9,263 per tonne in wheels, Rs 6,024 per tonne in axle grade steel, Rs 8,117 per tonne in CR sheets, Rs 1,026 per tonne in CR coils Rs 376 per tonne in electric grade steel, Rs 185 per tonne in GP\GC Rs 174 per tonne in ERW pipes, Rs 1,747 per tonne in thick plates, and Rs 16,978 per tonne in CRNO operations.
Also Read
The PSU, however, was making Rs 97 per tonne in its pig iron operations, Rs 6,599 per tonne in rails, Rs 3,579 per tonne in heavy structurals, Rs 52 per tonne in plates, Rs 1,007 per tonne in rounds, Rs 10,289 per tonne in sleepers, where it has a monopoly, Rs 1,085 per tonne in HR coils, Rs 823 per tonne in plates, Rs 2,938 per tonne in HR sheets, Rs 3,860 per tonne in TMBP, and Rs 3,698 per tonne in the SAW pipes business. On an average, SAIL was able to reflect an overall positive operational margin of Rs 399 per tonne of total saleable steel produced by it. While all of SAIL's Bhilai operations were functioning on net positive margins, almost the entire operations at its Durgapur steel plant is 4
losing money. Durgapur had a positive operating margin of Rs 10,289 per tonne only in its sleeper operations, where it has a monopoly.
Similarly Rourkela too lost money in all but its SAW pipes business where it reported a positive operating margin of Rs 3,698 per tonne. Bokaro had a negative operating margin in its pig iron, semis CR and thick plate operations, while it had a positive operating margin in its other businesses like, HR plates, HR sheets and HR plates, TMBP coils, and GP\GC operations.
On an average for the entire saleable steel produced by it Bhilai had a positive operating margin of Rs 1,860 tonne of total saleable steel produced. Bokaro had a positive operating margin of Rs 1,064 per tonne of total saleable steel.
However the operations of Durgapur and Rourkela made losses. While the Durgapur operations is losing Rs 2,193 per tonne of total saleable steel produced Rourkela is losing Rs 2,660 per tonne of total saleable steel produced.