BIHAR SPONGE IRON LIMITED
STATEMENT OF THE CHAIRMAN - MANAGEMENT COMMITTEE
In tune with the new industrial policy, several significant changes have
taken place and as such steel industry has shown signs of improvement.
Demand of steel has picked up with the result New Steel units with
diversified technologies are being put in. In the changed scenario
definitely sponge iron industry has to play an important role and it is
expected that this industry will flourish in near future.
The performance of the Plant during past three years had been severely
effected due to poor and inconsistent coal quality. The company could
achieve a capacity utilisation of maximum 78% to 80%. The consistent and
vigorous efforts to bring improvement in coal quality have yielded results
and the coal quality has been standardised as per standards defined by
Lurgi Frankfurt. A constant check is being maintained to keep the ash
percentage within the permissible limits. As a result thereof during the
year under review company produced 143208 MT of Sponge Iron and achieved a
capacity utilisation of 95.5%.
IMPACT OF DEVALUATION
The devaluation of rupee against Deutsche Mark since past three years has
adversely effected the profitability of the company. The rising Rupee DM.
parity from 1 DM = Rs. 8.38 at the time the plant was commissioned to 1 DM
= Rs. 22.4850 at present has put extra burden on the company.
Production of sponge iron is being encouraged by Govt. on account of import
substitute of scrap. The prospects of sponge iron industry appear bright.
The international prices of scrap have touched as high as 195-200 US dollar
per ton CIF, with the result the sponge iron prices are also showing
increasing trends. It is expected the sponge iron prices shall improve
further during 1995-96.
As already informed in my last report, with a view to reduce the overall
cost of production and make full utilisation of infrastructure facility, it
is proposed that another Kiln be installed. A detailed technical study by
an industry expert has been undertaken to evaluate the cost of 60000 tpa
and 150000 tpa Kiln. M/s M.N. Dastur & Co., company's technical consultants
are preparing their report based on the technical study of the expert. They
will be submitting their report shortly.
The company has been able to obtain the licence for prospecting for four
mines for Iron Ore in the State of Bihar. We are planning to make
operative these mines, when these are operative, then apart from catering
the need of the company, the mines can produce adequate quantities to sell
in the market for other sponge iron units as well for steel industries.
The company continues to strive for the upliftment of people living in and
around Chandil. The company apart from making available health care
facilities for the local people, also regularly organises various
development programmes in the fields of Sports, education etc which will go
a long way in helping the local people to improve the quality of their
I take this opportunity to thank Bihar State Industrial Development
Corporation Ltd. and the Government of Bihar, Lurgi, DEG, International
Finance Corporation, Washington as well as The Industrial Finance
Corporation of India Ltd, Industrial Development Bank of India, The
Industrial Credit and Investment Corporation of India Ltd., Life Insurance
Corporation of India, General Insurance Corporation of India, Banks and
Investing public for their continued support. I also appreciate the efforts
of the Employees of the Company at all levels towards the accomplishment of
UMESH K. MODI
Place : New Delhi
Date : August 16, 1995.