Bhilai Steel eyes Rs 3,00 crore net profit

Bhilai Steel Plant, which rakes in the highest profit among all the units of Steel Authority of India Ltd (SAIL), is set to register a net profit in excess of Rs 3,000 crore in 2004-05.

RP Singh, managing director of Bhilai Steel Plant, said the plant's net profit at the end of the fourth quarter will be more than Rs 3,000 crore on sales of Rs 10,000 crore.

In the first nine months of fiscal 2004-05, the plant reported a cumulative profit of Rs 2,366 crore.

Turnover and net profit in the corresponding periods of fiscal 2003-04 were Rs 8,850 crore and Rs 1,932 crore respectively.

The plant closed the financial year with a hot metal production of 4.51 million tonne, crude steel production of 2.25 million tonne, total finished steel 4.58 million tonne and saleable steel of 3.93 million tonne.

Singh said the plant would end the current financial year with a hot metal production of 5.3 million tonne, crude steel production of 4.9 million tonne and saleable steel production of 4.2 million tonne.

The capital expenditure for the year would be around Rs 1,100 crore.

Bhilai was able to achieve the financial performance despite 11 per cent drop in production of hot metal owing, to a coking coal crisis.

Bhilai uses a coal blend with 80 per cent imported coal. The coal bill for the last financial year was Rs 2,042 crore.

The impact after the coking coal price hike this year would be Rs 1,400 crore out of a total hit of Rs 2,800 crore in the bottomline of SAIL on account of higher costs.

The ruling price of coking coal was $126-$127 per tonne FOB.

However, Bhilai was bracing up to confront any future coking coal crises.

Meanwhile, Bhilai was actively pursuing the lease for the iron ore rich Rowghat mines.

A fresh feasibility report submitted by the Indian Bureau of Mines has been submitted to the state government of Chattisgarh.

Singh said the Chattisgarh government was appreciative of the urgent need for the mines.

Several meetings between the Union steel secretary, the state chief secretary and Bhilai Steel Plant officials have already been held.