OMC to focus more on domestic sale of ore

The Orissa Mining Corporation (OMC) has decided to focus more on the domestic market in the coming years in a bid to insulate itself from the volatility of international market in the ore business.

The share of domestic sale in the state-owned corporation's overall turnover is on a steady rise. In 2002-03, OMC exported 64 per cent of its ore production, leaving the rest 36 per cent to domestic sales. But in 2003-04 the trend is reversed. The company sold 57 per cent of its output in the domestic market while exporting the rest 43 per cent.

"This trend will continue in future. In the current fiscal our focus is more on domestic sales", said Sanjib Chandra Hota, chairman of OMC.

Explaining further, he said, the shift in marketing strategy is basically to insulate the company from the volatility of international ore trade particularly in the context of softening of market following recent cut down in Chinese imports.

The iron ore prices which had zoomed to a peak of $ 71 per tonne in March has already come down to $ 40 per tonne following softening of market and is likely to slide further.

In this context to achieve higher profitability and production targets, the company has to lay more stress on the domestic sale, he added.

OMC, which mainly deals in mining and sale of iron, chrome and manganese ore, plans to take its combined ore production to 111.5 lakh tonnes by end of 2006-07 from 32 lakh tonnes in 2003-04. Its target for the current fiscal is 55 lakh tonnes and the year next 91.5 lakh tonnes.

According to CJ Venugopal, managing director of OMC, increasing the productivity, lowering the operational cost and introduction of technology are going to be key areas which will receive utmost attention for maintaining the growth graph.

The company posted an operational profit of Rs 128 crore in 2003-04, up by 535 per cent from Rs 20 crore in the previous year while its net profit went up from Rs 13.9 crore to Rs 87.8 crore in the same period.

Similarly, the turn over the company at Rs 374 crore in 2003-04 was 89 per cent higher than Rs 198 crore achieved in the previous year. The target for the current year is to achieve Rs 570 crore turnover and Rs 250 crore operational profit.

Meanwhile, to improve the financial and physical performance, the corporation has roped in Indian Institute of Management, Bangalore as its consultant to introduce enterprise resource planning (ERP).

Similarly, for inventory and productivity management, services of National Minerals Development Corporation and national Productivity Council have been hired.