SAIL Not To Shut Down 3 Loss-Making Steel Units: Chairman
SAIL has launched a special incentive scheme which aims to provide the required impetus to local MSMEs.
Photo Credit : Reuters
State-owned Steel Authority of India Ltd (SAIL) will not close down three of its loss-making speciality steel plants if the company does not find buyers for these units, its chairman Anil Kumar Chaudhary said.
Earlier, the Centre had approved outright sale of Alloy Steels Plant (ASP) in West Bengal, Salem Steel Plant (SSP) in Tamil Nadu and Visvesvaraya Iron and Steel Plant (VISP) in Karnakata, as accumulated loss in these units was over Rs 370 crore in the last fiscal.
In July last year, the Department of Investment and Public Asset Management (DIPAM) had invited bids for 100 per cent stake sale in the three units of SAIL. However, the last date for submission of express of interests was extended thrice.
"Process of divestment is on. We will not close down these special units," SAIL chairman Anil Kumar Chaudhary told PTI, when asked whether the company will consider shutting down of these plants, if the steel maker does not find suitable buyers for them.
Three units are functioning as per demand but operating below their optimal capacities, SAIL officials said, adding that the combined manpower in these facilities is around 1,972.
"The bids received are under evaluation by the transaction advisor -SBI Capital Markets Ltd," the company said.
In 2012, SAIL had formed a joint venture with Japan's Kobe Steel for producing iron nuggets at ASP in Durgapur, but the project did not move as was desired.
Secondary steel users wondered why the public sector company has planned to sell its three units, when the Centre has been gearing up for "Mission Purvodaya" which aims at accelerated development of eastern India through integrated steel hub.
SAIL claimed it as a visionary step to spur growth and development in the region.
The eastern belt has the potential to add more than 75 per cent of the country's incremental steel capacity envisioned by the National Steel Policy. It is expected that out of the 300 million tonne capacity by 2030-31, over 200 million tonne can come from this region alone.
SAIL has launched a special incentive scheme which aims to provide the required impetus to local MSMEs based in the districts in which the steel maker's plants are located.
The incentives are expected to provide a relief of Rs 700-800 per tonne of steel to MSMEs under the scheme.