Cost optimisation, modernisation and expansion measures at SAIL are beginning to pay off, with the country's largest steelmaker posting a 20 per cent growth in sales during April-October this fiscal.
The Maharatna firm's consolidated sales rose 20 per cent to 7.52 million tonnes (mt) during the first seven months in 2016-17, the company said.
SAIL Chairman P K Singh said: "The management's sustained emphasis to improve every process from production up to reaching the consumers is beginning to show results."
The stabilisation of new mills under the modernisation programme has also contributed to the improved volumes and sales, he added.
"All this would strengthen state-run firm's performance at a time when there is a pick-up in activities of steel intensive sectors. Also, the positive environment brought in by Government of India, including its competitive trade policies and measures, has helped improve market sentiment," he said.
During April-October, domestic sales went up by 15 per cent with improvement in both long and flat products, it said, adding that exports volumes also rose by more than three times backed by a conscious strategy of the company to expand its footprint in neighboring markets.
On the production front, the April-October period clocked better performance with 22 per cent growth in saleable steel production compared with the corresponding period last year.
The techno-economic parameters also registered an uptick with 7 per cent improvement in BF (blast furnace) productivity and 3 per cent improvement in coke rate, SAIL added.
During the year 2016, SAIL has made improvement in its
market share by 12.7 per cent, reduced its unit cost of production, became EBIDTA positive for two consecutive quarters from April to September 2016 and increased production from new and modernised units, among others, he said.
While the company's celebrates its achievements, many more challenges still persist.
"As we aim to enhance our saleable steel capacity to 20 million tonnes, the market competition too will escalate simultaneously. Other producers are also increasing their capacities. We also have to be ready to face global threats as the domestic steel industry cannot be insulated from global trends where demand-supply imbalance will take a long time to readjust," he said.
"We aim to produce around 15 million tonnes in the current financial year and 17 million tonnes in the next financial year. Our preparedness for the same has to be there for the same," he added.
"In current dynamic market scenario, there is intense competition, the cost of production is escalating, resources are shrinking, and holding on to customers is becoming more challenging," he said.
Stressing that the companies need to relook at their business models, he said that the key to sustain and grow in this rapidly changing business environment is to "concentrate on 3 R's - Reconstruct the business model, Reinvent the strategies and Remodel the marketing approach in our company.
