Steel sector's performance excellent in Q3 ending Dec'06: Paswan

New Delhi, Jan 12: Despite massive outflow of funds on account of investments, the public-sector Steel Authority of India Ltd (SAIL) is poised to earn substantial profit for the quarter ending December 2006, Steel Minister Ram Vilas Paswan today announced.

Addressing newsmen on the annual performance of the steel sector here, Mr Paswan said the performance of SAIL has improved on account of its higher production and sales figures.

The analysis of the performance indicate that just about 29 per cent of the profit enhancement could be attributed to price rise net of input and cost escalation, while 71 per cent of the profitability was on account of management initiatives like product-mix improvement, improvement in techno-economics and better financial management.

He said the total Profit Before Tax (PBT) of profit-making companies under the ministry during the year 2005-06 rose to Rs 11,569.29 crore from 5,622.37 crore in 2003-04.

The contribution made to the government by these companies during 2005-06 saw a markable rise to Rs 13,363.67 crore as against Rs 5,873.28 crore in the year 2003-04.

Eleven of the fifteen companies under the ministry depicted positive sales growth for the third quarter of 2006-07 as compared to the corresponding period of 2005-06. The cumulative sales figures for the period April-December 2006 for the companies also registered significant increase against the corresponding period of the previous year.

The Steel Minister said Andhra Pradesh based Rashtriya Ispat Nigam Ltd (RINL) which undertook the expansion project to increase the production of its liquid steel capacity from three million tonnes (MT) to 6.3 MT at an estimated cost of Rs 8,692 crore in October 2005 is expected to be completed by October 2009. Mr Paswan said in view of the rapid growth in demand for steel in India and outside as also the need to expand and consolidate to maintain competitive position vis-a-vis the private sector, the Board of Directors of RINL approved in principal the proposed expansion to 16 MT by 2018 at an estimated cost of rs 25,000 crore.

Detailed plans of exploring various alternative appropriate frontline technologies to ensure raw material security and improving techno-economics have been taken up. The most modern project management and supervision procedures are proposed to be utilised for timely implementation of the expansion plans in a cost-effective manner.

He said it is expected that the expansion plans will ensure RINL to emerge as a leading steel producer in the country, maintaining its reputation for product quality.

He said for SAIL the expansion plan to raise its oputput to 23.84 MT of hot metal from the present level of 14.6 MT is underway. The total project cost is estimated at around Rs 39,433 crore and the entire expansion exercise is scheduled to be completed by the compressed deadline of 2010, he added.

Mr Paswan revealed that SAIL and RINL are expediting their efforts for expansion of distribution networks. Preference for SC, ST and OBC are given while alloting district level dealerships. Out of the 450 dealers appointed so far, 202 are from SC and ST category.

Efforts are on to have dealership in all districts by the end of the current financial year. In the case of RINL, of the 98 dealers so far appointed, 20 belonged to SC/ST category and 15 to OBC, he said.

UNI