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VSP net profit at Rs. 450 cr.

By Our Special Correspondent

VISAKHAPATNAM APRIL 8. Thanks to the spectacular achievements on all fronts by Rashtriya Ispat Nigam Limited — Visakhapatnam Steel Plant — it closed the last fiscal with a net profit of Rs. 450 crores for the first time against a net loss of Rs. 75 crores in 2001-02.

Terming 2002-03 as the "year of turnaround'' at VSP's annual media conference on Monday, its acting Chairman and Managing Director, B.K. Singh, attributed this to the "strategic and aggressive treasury management techniques'' adopted by the management. He hinted at the plant making a net profit of Rs. 600 crores in the current fiscal.

VSP registered a gross margin of Rs.1,045 crores in 2002-03 against Rs. 690 crores previously and a cash profit of Rs. 910 crores (Rs. 400 crores).

Explaining the techniques, Mr. Singh said the VSP obtained interest reductions and waivers from banks and financial institutions on term loans. "We could swap part of the high-interest-bearing loans from banks and pre-pay the entire outstanding loan of Rs. 590 crores taken from the Unit Trust of India and clear Rs. 85 crores out of the Rs.160 crores bank loans ahead of schedule. This way we effected a savings of around Rs.150 crores on interest charges.''

Apart from this "dynamic financial and cost management,'' he listed the following four key parameters that had led to this turnaround: innovation and upgradation of equipment; efficient operations coupled with waste utilisation and cost reduction measures; marketing strategies aided by speedy decision-making to achieve record sales; and motivation and morale-boosting of employees.

On the production front, Mr. Singh said VSP achieved 116 per cent capacity utilisation in respect of hot metal (3.942 million tonnes), the highest for any steel plant in the country. While liquid steel production stood at 3.357 million tonnes (112 per cent capacity utilisation), salable steel (3.056 million tonnes) registered 115 per cent utilisation. The capacity utilisation in respect of other items such as sinter, cast bloom, billet, bar products, wire rods, medium merchant structural mill and products ranged from 106 to 113 per cent.

The techno-economic performance of VSP continued to excel, Mr. Singh claimed.

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