Ispat Targets 20% Cut In Production Cost

Ispat Industries, which posted a Rs 312 crore loss in last fiscal, is working overtime to reduce its cost of production by 20 per cent to cope with the current downturn in the steel industry.

The company is planning a change in its production method wherein it would use only hot metal in producing hot-rolled coils. Ispat currently uses 50 per cent directly reduced iron (DRI) and the rest hot metal in the production process.

Vinod Garg, director at Ispat Industries, said, "This move will help us reduce the cost of production by Rs 2,000 per tonne. Theoretically speaking, the power consumption in the production process will be zero."

 

"We are already through with trial runs and are now looking at commercial production under this modified process," he added. Because of its dependence on grid power, Ispat is one of the costliest producers of HRC in India.

Currently, Ispat's cost of production is more than Rs 10,500 per tonne of hot-rolled coils. This is far more than that of Tata Steel and Jindal Vijaynagar Steel which produces at around Rs 7,500 and Rs 8,000 per tonne, respectively.

Ispat's plant at Dolvi, Maharashtra, is based on twin shell electric arc furnaces with hot metal charging and thin slab casting technology. The company's blast furnace is fed with DRI.

According to the company, its production level will touch 2.4 million tonne by April next year and will gradually reach three million tonne. The much-delayed captive power project, Ispat Energy, has made some headway in recent times with the company dividing the project into two phases of 110 mw and 135 mw each.