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Major steel producer Sail has chalked out a roadmap to reduce costs and save about Rs 5,000 crore in the next three years.
A company statement said, a special initiative -- COIS (Cost Optimization Initiatives of Sail) was launched outlining the road map for achieving an overall saving target of around Rs 50,00 crores during the next three years.
This was decided in an apex strategic confluence on cost control and cost competitiveness organized by Sail at its Management Training Institute, Ranchi on September 11.
Under the special initiative, the areas that have been identified for continual cost reduction include input optimization, improving the operational efficiency by optimally utilising the available assets, quick stabilization of the newly commissioned units and reducing overhead costs and enhancing employee productivity.
For each of the areas, the integrated steel plants and units have identified potential cost drivers.
C S Verma, Chairman, Sail highlighted the challenges before the organisation due to prevailing market conditions and intense competition. He urged everybody to think out of the box and walk the extra mile to enhance competitiveness of the company.
The Indian steel companies are facing the dual challenge of high cost of production on one hand and lower sales realization on the other.
The cost of production is being driven up by the volatility in the prices of coal, higher railway freight, power tariff, royalty on minerals and depreciation of the rupee while prices are flat due to prevailing market conditions leading to severe pressure on margins, the statement added.
