An appeal letter was sent To Hon’ble Union Minister of Civil Aviation and Steel, Shri Jyotiraditya M Scindia and Steel Secretary, Shri NN Sinha. In it, he asked to give instructions to SAIL to participate in this EOI released by RINL. It is stated that if SAIL participates in this EOI notification given by RINL to get steel products in return for providing working capital/raw materials required for steel production, it will be beneficial for both these companies.
Unfortunately Visakha Steel could not reach its full production potential due to financial crisis. RINL has not allocated captive iron & coal mines since its inception. As a result, the cost of production is 6 to 7 thousand rupees per ton of steel higher than other steel plants in India. Sail has its own iron mines. Whereas Visakhapatnam is buying iron ore from NMDC at steel market price. On account of iron ore, Visakha Steel is incurring an additional cost of 4 to 5 thousand rupees per tonne of raw steel production. .
Visakha Steel is associated with Gangavaram Port, as the two are side by side, and receives imported coking coal through a conveyor. At the same time SAIL is importing coking coal from Gangavaram port and transporting it by rail, which costs over Rs 1,000 per tonne as freight. SAIL does not have a production unit for steel products in South India and has to shift from the North country region to its South marketing yards. In recent times SAIL has secured good export orders in structural and intermediate products. All these are produced at RINL and exported through two major ports near the Visakhapatnam steel plant will be cheaper.
If SAIL enters into an agreement with RINL, SAIL will save a lot of money in terms of logistics and utilization of iron ore. RINL will also benefit as cost of production will be significantly reduced through maximum utilization of equipment and well-trained human resources.
SAIL and Visakhapatnam steel both benifits from this tie up. Even in these tough times RINL has recorded a turnover of around Rs 23,000 crore in the financial year 2022-23, with only two blast furnaces functioning, coking coal prices ranging from $100 to $600 a tonne in the wake of the Covid aftermath Up since 2022 Jan. The third blast furnace was closed in January 2022 due to unaffordability and lack of working capital. If full scale production is not achieved immediately, Visakha Steel will drown further . Machines built by spending thousands of crores get damaged. So a decision should be taken soon in this direction and full scale production should be started. This tie-up of SAIL and RINL will definitely strengthen our government’s mission of “Atmanirbhar Bharat”.
So SAIL management should see tie-up with RINL, he said in the letter. Also, the Association of Steel Officers has written letters to the Chief Ministers of the two Telugu states asking them to buy Visakhapatnam steel for the government projects required for the construction of the state. Mr. MVV Satyanarayana, Member of the Visakhapatnam Lok Sabha, wrote a letter to honorable Chief Minister of AP Shri Jaganmohan Reddy and requested to support RINL by purchasing steel for state housing projects and othe infra projects. He responded to that and MP also said that he would personally discuss these matters with them and request them to take steps to run vizag steel with full capacity.
Steel Officers’ Association also sent a letter to Telangana Chief Minister KCR asking him to purchase steel from Visakhapatnam for the steel required for their projects. Responding to this letter, the Telangana State Industries Minister’s office assured that they will definitely take it to the attention of Chief Minister Shri KCR and will help RINL.
Katam SS Chandra Rao, President
KVD Prasad, General Secretary