Steel Majors Fall Short Of Production Goals

Majority of steel majors including SAIL and Tisco have failed to meet their respective production targets during April -December, 1996.

According to the Union government-constituted joint plant committee report, while output of finished steel by the primary producers increased by a mere 2.6 per cent during the period, the output of secondary producers swelled by 27.4 per cent, making for a total production growth of 14.5 percent.

It may be mentioned that the country had produced 197.6 lakh tonne of steel in 1994-95, and 197.1 lakh tonne in the 1995-96 period. In the finished steel category, SAIL had produced 71 lakh tonne in 1993-94, 72.3 lakh tonne in 1994-95 and 74 lakh tonne in 1995-96. Tiscos production of finished steel was 9.7, 13.7, and 18.31 lakh tonne of steel in 1993-94,94-95, and 1995-96, respectively.

However the approximate consumption of steel grew by only 11.2 per cent during the period, thereby leading to sluggishness in the market.

Interestingly, in the flat products segment, the output of prime steel producers dropped by 1.5 per cent to 45.7 lakh tonne during April-December 1996, from 46.39 lakh tonne in the corresponding period of 1995.

On the other hand, the output of secondary steel producers like Essar and Lloyds grew by 72 per cent from 23.4 lakh tonne to 40.7 lakh tonne, thereby boosting the total production in this segment by 23.4 percent to 86.4 lakh tonne from the earlier 69.8 lakh tonne.

The total demand in this sector grew by 21 per cent to 93.3 lakh tonne from 77.3 lakh tonne during the period.

In the finished steel category, primary units churned out 78.18 lakh tonne during the nine months of 1996, a 2.6 per cent growth over the previous production figure of 76.19 lakh tonne. Here, too, the main growth in output was shown by the secondary players.

Their production grew by 27.4 per cent to 89.34 lakh tonne from 70.13 lakh tonne previously. The total production in this division grew by 14.5 per cent to 167.52 lakh tonne from 146.32 lakh tonne.

SAIL produced 65.52 lakh tonne of saleable steel during the period, a 2.2 per cent increase over the 64.08 lakh tonne produced by the company during the corresponding period in 1995. However the production was 7.9 per cent lower than the planned output of 71.14 lakh tonne.

Tisco produced 20.73 lakh tonne of saleable steel during the period, a mere 0.1 per cent improvement over the budgeted 20.70 lakh tonne. Tiscos production was 2.4 per cent more than the previous years production of 20.25 lakh tonne.

Saleable steel production at Vishakapatnam Steel Plant dropped by 2.2 per cent to 14.88 lakh tonne from 15.22 lakh tonne in the first nine months of 1995. The companys production target for the year was 19.81 lakh tonne.

Indian Iron and Steel Company produced 2.45 lakh tonne of saleable steel compared with 2.25 lakh tonne in the previous year, despite a targeted production of 2.69 lakh tonne. In the finished steel category, SAILs production dropped by 2 per cent in the April-December 1996, to 50.52 lakh tonne compared with the previous production of 51.53 lakh tonne.

The production was 10.5 per cent lower than the targeted figure of 56.47 lakh tonne. Tiscos production in this category was 14.92 lakh tonne, which is 0.7 per cent lower than the target of 15.03 lakh tonne set by the company. However, the figure is 11.8 per cent over the previous output figure of 13.34 lakh tonne. In this category, Vizag Steel produced 10.70 lakh tonne as against a target of 14.80 lakh tonnes. The company had produced 9.36 lakh tonne in the first nine months of 1995.

Meanwhile, all efforts by SAIL to cut its inventories levels have failed to have much of an impact.