Rise in production helped SAIL to stay profitable, says Chairman Anil Kumar Chaudhary
SAIL Chairman Anil Kumar Chaudhary said that the last two months of the last financial year were very good for the company and in this period they produced 2.95 million tonnes.
Public sector company SAIL posted a Rs 468.40 crore profit in the fourth quarter ended March 31, 2019, against a standalone net profit of Rs 815.57 crore in the corresponding quarter of the previous financial year. SAIL's standalone income increased to Rs 18,752.36 crore in the March quarter from Rs 17,264.86 crore in the year-ago period. The company managed to make a profit despite an increase in input material costs and fall in prices of final products.
SAIL Chairman Anil Kumar Chaudhary told Zee Business TV that all these factors could not dent company's profit due to increase in production; and in the third and fourth quarters, the company has posted good performance. In the third quarter, the company's profit before tax was at about 950 crore and in the fourth quarter, it was about 700 crore.
"This performance was achieved by cutting cost and improving operational efficiency. Volume plays an important role in reducing costs. When the volume increases the fixed cost is divided into larger units and per tonne production cost goes down and we did exactly the same," he said.
He added that the last two months of the last financial year were very good for the company and in this period they produced 2.95 million tonnes. Chaudhary said that when production goes up then there comes improvement in techno-economic parameters." We could reduce the cost by Rs 2300 crore. There is an improvement in blast furnace productivity, CDI consumption, energy efficiency, and concast production," he said said.
"The company has given a target of Rs 3000-3500 crore cost reduction to its employees in the current financial year. In steel industry the more value edition you do more you have opportunity to earn. Value added products have multiplier effect on steel manufacturers' profit. If you do value addition of Rs 1,000 then the change in value will be about Rs 2,000 to Rs 2,500, and that means it has a multiplier effect of 1 to 1.5 times," the SAIL chairman said.
The company is now putting more emphasis on increasing value-added products. This financial year, there has been an increase of 13 to 14 percent in value-added products, he said. The company has introduced new products like NPV 750 and LSV wheels. Besides that the company has increased the production of value added in rail products.