BSL aims at Rs1500 crore profit in three years
Financial year 2013-14, which also coincided with the 50th anniversary of Bokaro Steel Plant (BSL) of the Steel Authority of India Limited (SAIL), proved a watershed year, signalling a long-awaited turn-around in plant operations.
The bet on taking up major maintenance activities started paying off, as the losses accrued in the first half of fiscal 2013-14, on account of outsourcing of inputs like coke, sinter and pellets, were significantly neutralised during the third quarter. The first two months of the last quarter indicated a steady run for BSL, pointing to positive year-end accounts and a robust momentum in operations.
Meanwhile, work on the upcoming new 1.2-million tons (mt) state-of-the art cold rolling mill-3 is nearing completion. Commercial production from this unit is likely to begin in early 2014-15, which will help BSL recapture certain value-added market segments and boost
profitability. Commissioning of the mill will also enable BSL to complete the repairs of cold rolling mills-1 and 2, and prepare the ground for further enhancing the share of value-added products.
Steel Insight’s Rakesh Dubey and Tamajit Pain caught up with BSL CEO Anutosh Maitra to get an overview of the plant – a major producer of flat products – and its plans to refurbish its equipment and expand capacity as the steel sector, like other industries at this juncture, is in the doldrums owing to a low demand scenario.
Maitra says that he would be aiming at increasing BSL’s profit to Rs1200-1500 crore levels in next three years by improving automation levels and better equipment utilization.
What, according to you, is the current market situation so far as steel demand and prices are concerned?
Steel demand is not as brisk as we would like it to be. With the existing over-capacity, price correction will only happen with increase in demand.
We are all waiting for the major event (general elections) in the country to get over so that the industry picks up from where it is today. The last few months had been fairly good for us and we will be faring well this month too. At least, Bokaro would.
But what the future holds is uncertain. We don’t know how the markets will actually evolve and what impact the dollar rupee parity would have because the rupee is already strengthening … it is better than Rs60 or at about Rs59 to one US Dollar.
Certain issues will remain … like raw material security, infrastructure and logistics, projects, technology etc. These issues would continue to plague the steel industry for some time and the key to success would lie in the stimulation of new facilities that would be coming up. And this is true for all companies. Even Tatas, I think, have given a timeline of 2015 for the Odisha project but the markets are stagnant...
Steel demand is weak globally. What are your views on the scenario?
It has always been the case, except for a brief period of Olympics in China. Globally, the World Steel Association has projected that steel consumption or demand will pick up by about 3.5 percent or so and may be Indian consumption will increase by 5.5 percent during the current period. So, we have to create capacities accordingly provided our infrastructure growth picks up. Infrastructure comprises 60-70 percent of the Budget but there is always a rush to exhaust the funds towards the end of the fiscal. So, we are in any case spending less.
The steel market is not growing as it was projected to and that is putting a lot of pressure on steel-makers?
Yes, it is. The only silver lining is that imported coal prices are coming down. That is possibly because of higher supplies from Australia.
But it is said that coal prices are soft mainly because of low demand from China?
Chinese demand will be toned down because of restrictions. But the kind of impact that the Chinese demand had during the Olympics, may not be repeated. Huge properties in China had come up during that period … shopping malls, railway networks etc, which means that they had made major investments which boosted demand at that time. As far as India is concerned, customers will decide the demand for steel.
Demand has been thin in the last 2-3 years, mainly because of the economic slowdown. What is your view?
The power sector is almost in a slumber and only now it is talking of huge orders. But then once again this is connected to some coal linkages and that is why power projects which were in inertia are now waking up! In infrastructure… for example, roads, not much is happening. There is a general sense of insecurity among the investing community.
Once you invest, you will think of the results. To that extent Bokaro is just like an island. There is nothing around us that will push up economic activity. When I see the map of Bokaro, in the south, there is Purulia. To the north, Giridih, Hazaribagh and Dhanbad. There are no industries around, if you notice. Whatever industries are there in and around the plant are mostly ancillary industry and also a large amount of trading activity. It’s difficult to be in the public sector and operate in a sort of an island.
Industries in the private sector, the Tatas for instance, have the flexibility to operate, which we do not have in the public sector. Moreover, the Tatas have been in this industry for a long time. We have a presence of about 50 years. Certain ancillaries have been developed around the Tata plant. Its main objective is to cater to the automobile sector. All types of auto aggregate manufacturers have set up their plants in an around the Tata plant.
There is a steel market around Bokaro in places like Jamuria, but it is only recently that they have started buying product from us because they have relationship with Tata.
I do not know whether it is relationship or binding because I have not been able to understand the system where steel is given to them to convert, but steel price is not indicated to them as the product pricing is being dictated by Tatas. However, this also means they are in a certain disadvantageous position and are facing bad times as well because automobile sector is not doing well. The plants around Adityapur are operating at very low capacity utilization and it has been a bad time for them also.
Bokaro is also planning to set up a cold rolled mill (CRM)?
Yes, it is in the offing. It will take another 2-3 months to commission the same fully.
How do you see the demand scenario for CRM products going forward?
It is too early to ascertain. But I believe the demand for CRM products would be fine. We have exited certain cold rolled segments. We are planning a comeback in these areas with better products and value added products with quality. We have a presence in 60 percent
of the products but not the balance 40 percent. Our clients in the west have a requirement for such products. With the new CRM, we will cater to this segment. However, Bokaro is not aiming to produce auto body sheets. We are not aiming at auto body sheets at all. That is not my present segment. But I am definitely going to enrich our existing product profile and then improve it.
It is like this. We had exited a particular market and will go back to the same market with better products and that will give me a little bit of edge.
What were the reasons for exiting those markets in the first place?
The old CRM didn’t perform the way it should have. In the hindsight, it would appear that we are setting up a new CRM to take on the old one. But that’s not true. It is a coincidence that the old CRM had not been performing but yes when the new CRM comes up we will basically re-occupy the market that we once exited. When CRM 3 comes up, the major input will move towards CRM 3 and we have plans to take up certain activities in the old CRM as well as we are not writing it off. It’s a 1.6 million tons per annum (mtpa) plant and we will continue to produce 1.6 mt from it.
Any plans to rejig your product portfolio?
No. Not now. As I said, 40 percent minus from the existing portfolio is a big segment. So I must first get into that segment, which is pretty big. It will improve our product profile. So far as other products are concerned, as envisaged now, BSl will continue to be a dedicated flat steel producer after expansion?
What is the current status of the expansion plan to increase capacity to 5.77 mt?
The 5.77 mtpa is the planned capacity by 2016-17. We are operating four blast furnaces. We have a capacity of producing 4.7 mtpa, but over the past 3-4 years we are producing anywhere between 4.1 mtpa and 4.3 mtpa. This year (2013-14) we will be finishing off with about 4.1 mt production.
BSL is currently operating only four of its blast furnaces, and plans to continue with this arrangement for another year or so.
One of the blast furnaces (BF-1) is under repair. It will be back in action by 2015. Once that is back in action, we will take up the capital repairs of Furnace-4, due to which we will have another 6-8 months of poor furnace operation.
Meanwhile, we will do rejig of our coke oven operations so that we have adequate coke for running our furnaces.
Thus, by the end of fiscal 2017, we should be able to operate at our full capacity of 5.77 mtpa.
How much money has been spent on expansion and by when the balance would be spent?
The major investments for 5.77 mtpa of hot metal have been made.
Orders worth about Rs 4900 corre have already been placed and only about Rs 340-odd crore remain to be committed. Of course some incidental provision has also been kept.
It has been reported that SAIL may go for expansion of capacity at BSL to 10 mtpa because it is the only plant where expansion would be comparatively easier. What is the latest on this and has the board approved this?
SAIL’s Vision 2025 does envisage capacity expansion of BSL to 14 mtpa, with an intermediate stage of 10 mtpa. However, concrete project proposals will take some time to come.
As of now, nothing has been approved by the board. We are basically looking at the prospect of the expansion of SAIL with respect to the national steel policy by 2025. So our vision 2025 looks at about 50 mtpa of steel-making capacity.
It is in that context that Bokaro’s expansion plans will possibly be around 14 mtpa. Sure, Bokaro will get there. You may wonder why 14 mt? it is so because there is a land bank available to us on the northern side of the plant which will support production of this 14 mt.
So whatever our plans are, today onwards we will look at that 14 mtpa, may be, in two stages of 5.77 mt and 10 mt and finally 14 mt, the timeline for which would be 2025.
We have to go on looking at this. But then once again my board will try to find out whether the investments in Bokaro will fructify the enablers and there will be enough raw material supply from our mines in Kiriburu, Megathaburu, Bolani and Gua. It would also want to know whether the water and power sources would suffice for that sort of capacity.
I think power sources will suffice as per the present estimates, but water would remain a problem and we will have to see how we can manage this specially in terms of reducing wastage and increasing efficiency of the processes and systems where there is only one stream flow and emphasize on close circuit water system.
In fact, our CRM 3 is being set up on such a closed circuit water system.
Another issue is how much the railway logistics is going to support us. We have been meeting the Railway Board people and we are looking at enhancing the carrying capacity of certain wagons.
We are also looking at improving the yard logistics – within the BSL and just outside our plant. We are also looking at how to strengthen our existing quality of 320 km of railway line within the plant and for this we are taking help of RITES.
We have a huge gas network for supplies to all our heating systems and basically re-utilise the gas output in coke ovens and blast furnaces and the finished steel production. We are looking at having a parallel pipeline so that the network remains strong. So these are things we are looking at because infrastructure has to be strong and we are looking at those things and we all have plans in that direction.
And what the board has done is they have not intervened in these processes so that we are ready with these infrastructures. We are upgrading the entire SMS 1 by changing the converter into suppressed open type convertor and we will have a caster in the first phase and in the second phase we will have a convertor, an RHOB and may be a slab caster. This all part of upgrade that we have planned for SMS1.
We are also looking at a new coke oven battery – battery No. 9. For this also the proposal has gone.
We are also looking at a new sinter plant and for this NIT has been uploaded and we are in the process of evaluating. In terms of capacity it will be around 1.5 million tons per annum.
So far as the new coke oven battery is concerned, it would be an identical one with 69 ovens with eavh oven delivering about 15 tons per day.
We may also go for tall batteries, but that we will see when we go for tenders. This is because the coke demand will continue and with respect to raw material security, prime coking coal will remain a problem and if BCCL is not making clear with respect to washed coking coal availability then it will be difficult for us.
BSL had been pioneer in using CDI in blast furnace. Is there any strategy to improve CDI levels? If yes, what would that be?
We use CDI in all our furnaces. Theoretically, it is supposed to impact 1:1 but this does not normally happen… it usually ranges from 0.8-0.9 because it depends on a lot of other operating parameters. Depending on how the furnace operates, the replacing ratio could be 0.8, 0.9 or even 1.00. But it doesn’t usually work at 1.00.
Of course we plan to improve CDI levels usage in furnaces, but I don’t know really what the strategy would be. What is happening is we are unable to charge CDI to the optimum level. For example, if we have capacity to charge 28 kgs in the furnaces, our operating CDI or distribution is only to the extent of 19 kgs or 20 kgs.
So we have to change the distributor and the linkages. But we are not doing it predominantly, even today, we are using it but we have not really been able to enhance the usage.
As soon as my other raw material inputs improve, then these things will automatically improve.
For example, today (as on March 31), we are operating at good capacity utilization and the month has been very good for blast furnaces because of which CDI levels have also improved during the month.
What is the situation so far as coking coal availability from BCCL is concerned?
To make coke, I still need about 25 percent of indigenous coal and this is not ensured to me. I land up using may be 85 percent of imported coal instead of 75 percent of imported coal whereas Tata Steel is using 60 percent imported coal. It has that advantage. Its captive coal mines and washing facilities are better.
One wonders why do steel-makers not wash coal? We are basically steel-makers. We can’t start washing coal. Washing coal needs additional water and you have to evacuate the slime.
Coal India also says it’s a miner and that it is not supposed to wash coal?
Our contract with it is for coking coal which has to be washed. It is now setting up washeries. In fact, it will have additional 18 mt of washed coal in this facility in the next three years. But how will it do that?
None of the washeries is coming up?
I know. One of the recent issues of your magazine informed that nothing much has moved on this front. In fact, this year, it is going to end up with 1.3 mt of washed coal.
What is the contracted quantity? How much washed coking coal are you supposed to get from CIL annually?
Our contracted quantity is every gram generated from BCCL. Naturally we get less. Around 2.8 mt is what BCCL was supposed to mine and we were supposed to take this entire quantum. But it actually supplies 1.8 mt or even less than that. This year it will end up with supplying 1.4 mt.
There was a recent piece of news that, at a time when international coking coal prices are falling, BCCL is looking to charge higher rates from its clients?
No, that’s a wrong approach. They started on a very wrong note. When coking coal was being sold in the international market at $300 per ton, CIL/BCCL said please give international prices. We said that we are ready to give you the international prices provided you assure us of the same quality.
So they went on and reduced the washed coal availability and now the coal prices have reduced.. it has reduced prices at bit but reduced washing too!
In fact, BCCL CMD is on record saying that washing has to be done by SAIL. We are saying we have asked for coking coal and coking coal has to be washed as coking coal has certain properties and you have to ensure those properties.
CMPDI recently classified some steam coal mined by BCCL and CCL as coking coal. Has this helped SAIL in any way?
Those are direct feed coal. So whatever quantity is supplied to us we are using it. They usually supply 4-5 rakes a month, which we are using. In fact Durgapur and Bokaro Steel Plants both are using it because it is produced in the eastern belt and we too are in eastern belt.
Do you have any plans to set up washeries?
We don’t have any plans for washeries. We have an understanding with Tata. It has a washery in Jamadoba. We will see if we can take coal from BCCL and get it washed at Jamadoba.
Considering the current market situation, are you going to opt for a rejig in your production pattern?
No. I don’t have to because, as I told you, Bokaro’s natural market is the north and the east. The west looks at good bargains from Bokaro. And unit costs because the unit size at Bokaro is good.
Players from Western region say that they will take material from us , but that has to be comparable with imported material cost. In the last 9-10 months, imports have fallen. It is only in the last month (at the beginning of March) that some imports have been booked and which will possibly start landing towards the end of April or beginning of May. There is a general cycle of about two months.
These are traders and not users who import primarily to remain competitive. So this category in the western region always sits on the hedge. When I go to Mumbai they ask for material and look at a different profit mechanism.
But the north and east are regular users of our material. They take in huge bulks in Ludhiana, Jullundhur, Chandigarh, NCR and Kolkata, Dankuni. In the south Jindals are prominent and it doesn’t work for us there as there is no freight advantage. We do not have a presence in the south and will neither consider so as of now except for catering to certain needs of Railways and BHEL.
It has been found that inventories of various steel-makers had gone up because of low demand from the market. In that context, what has been the inventory level in BSL? Are you comfortable with it?
We have not added finished steel inventory during 2013-14, nor have we been able to trim the existing inventory in a desired manner. However, we hope that the demand scenario will improve and enable us to liquidate our inventory.
How are you trying to address the inventory situation in BSL?
The inventory situation has been bad. When I had joined, it was around `920 crore, but it has fallen to around `865 crore at present.
Over the past two years, we have brought the inventories down, but we still need to bring it down.
We have shifted our strategy towards reviewing our needs. So we are now positioning a particular practice where we will be reviewing all our indents and even if the orders are placed and delivery has not taken place we will look whether we need the material otherwise we will stop that. This is a practice we have started. We have also in the process of ordering indenting holidays in a particular month. This will help us in bringing down inventory situation.
What would be a comfortable inventory level?
I also really don’t know. Presently, we have got about 9 months inventory. I am told that a plant of this size and the processes that we have, should probably have inventory of four or four-and-a-half months. We are double that. But the idea is to curtail inventories and buy what is needed. These things will help us and I hope that the inventory problem can be solved.
In our system, we advertise about whatever inventories we have and if other plants need it they pick it up from us. Also we have stock of certain spares, which may be needed by other plants. For example, today, I may be having an inventory of a particular spare, which is needed in another plant, we can provide such spares to that plant to bring down our inventory.
These things we are already doing, but the crux or the trick would be to curtail inventories and to buy what is needed. So that behavior has to come in and with regard to capex we are emphasizing again on small investment. These things will help us and I hope that inventory problem can be solved.
I really don’t know but I have given myself two years. We have a new team of executive directors and we are looking at different strategies of purchase and to reduce procurement cost.
What is your current sintering capacity and any plans for expansion in the near term?
Actually we are planning a new sinter plant and the old sinter plant will be under repair. We are operating around 103-104 percent of our capacity at existing sinter plant.
The government is looking at 300 mt capacity by 2025 but it may not materialise because of the fact it is based on higher projections?
There is no harm in planning things so that infrastructure and logistics can be developed. Even if not by 2025, then at least by 2030. There are a number of issues on railways, ports because this material produced needs handling. For example to produce one million ton of saleable steel I need to have another 4 mt of input material.
Demand has to be there otherwise there is no use in producing?
We can’t plan in isolation.
India’s crude steel production plan has gone haywire. Everything was planned at a GDP growth rate of 8-10 percent. That is why there is excess capacity and going forward this will be repeated. What are your views on this?
This is a fact and excess capacity has remained over the last 15 years. Even when we joined SAIL in 1980, the 90’s saw excess capacity. That is when the excess capacity issue cropped up. All these private steel makers came up from 1989 to 1994. They started with galvanising lines, coating lines etc and then started going backwards. Even back then the story was that we had excess capacity.
The first downturn that took place was seen as excess capacity and less growth. The next downturn took place outside the country and even then today we are told that it was because of excess capacity. It means that projections for consumption are mistaken.
Typically any investment in a steel plant takes about four years to fructify. It’s an average figure. And it is this cycle that one has to play on to decide on how much to put in. So, excess capacity will be there if we do not plan for consuming the steel. It is this particular planning function that has to be seen. I feel that industries must be assured of atleast the usage of products manufactured. That can only come if there is sustained infrastructure investment in the country. We are a poor country with may be 57- 60 kg of per capita consumption. There is so much of scope.
Some steel companies like Essar are operating at 30-35 percent capacity?
They also banked on some kind of projections and made investments, but the demand did not grow as per projection. It invested but results may not come to fruition.
That is the reason why Jaypee Cement is shedding load. It has a joint venture with us. So it has to go through various stages.
The first right of refusal is with us. Then the lenders have to OK it, then the AGM has to approve it, and then actually it can be effected.
So what could be your stand on this?
In case of Bokaro, the Jaypee Cement venture had been profitable for both the promoters. It also utilises solid waste like BF slag. It’s a win-win situation for both of us. Even if Dalmia or some other company joins us I don’t think we would think of selling off. Because it is bringing us profits.
So Jaypee can sell part of its stake …?
Yes. It is selling because it is in a debt trap and when you are in a debt you sell your best property and make good profit.
You have already placed orders for your planned expansion. Who are your technology providers?
SMS, Siemens, Danieli and Paulworth among others are the technology providers. They compete with each other for the orders. Within the country we have EPC contractors like L&T and McNally Bharat. When the technology providers come they come married to local providers.
You mentioned that you will not get into auto body sheets?
In the automobile sector we will not do auto body sheets. For auto body sheets you need RHOB facility. RHOB is a secondary steel refining procedure. But apart from this there are many aggregates that go in the auto body.
Within the group, we cater and supply a lot of material to the heavy vehicles segment. Railways take a lot of steel for its wagons and wheel and axle from SAIL Bokaro is a big category that goes out. Rails are facing some challenges but we are looking at overcoming those.
Out of your product portfolio how much is automotive?
Automotive is less. In HR coil, some of these go to automotive aggregates. A lot of material goes to the Railways. Our product also goes to Defence and cold rollers.
How do you see the situation going forward especially in view of the comments by experts that the steel market globally and also in India is unlikely to improve till the next few months?
In the past couple of years, the forecast for steel growth by the World Steel Association and other experts has been better for China and India than the global average. India has huge growth potential, and the 12th Five-Year Plan proposes significant investments in infrastructure. If GDP growth picks up, which we are hopeful about the domestic demand scenario.
It has been pointed out that if India’s growth rate tapers, as it has in the last two years, demand for steel will not be as high as it was expected and a number of new projects will face huge problems – similar to the situation witnessed in the mid-90s. How do you see the situation at this point in time?
It is difficult to predict the growth of the national economy. However, the domestic economy has fared better than the global average, and we expect it to improve further with recovery in the global economy.
What will be BSL’s strategy to counter the sluggish market situation?
We are focusing on capacity utilisation, cost reduction and increasing the proportion of value-added products.
What is your current iron ore requirement annually and what would be the requirement post expansion?
Our requirement or iron ore is 6.9 mt for this year's target of 4.35 mt of hot metal. For the full capacity of 5.77 mtpa, the iron ore requirement will be around 9.2 mtpa.
What is BSL’s sintering capacity at present? Any plans for expansion there?
Our current capacity is for 6.2 mtpa of skip sinter. The proposed new sinter plant will have a capacity of 3.7 mtpa of gross sinter.
What will be the requirement of iron ore, coking coal and coke post expansion? Of this, how much will be your captive production and how much will be procured from the market?
SAIL intends to be self-sufficient in terms of iron ore requirements and coke production capacity. Coal, of course, has to be sourced from external sources, both domestic and international.
What is your current metallurgical coke requirement annually?
Our coke requirement for 2014-15 will be 2.2 mt.
How much coke was purchased by BSL from the market in 2013-14 and what is the situation like for 2014-15 after the new ovens were set up?
BSL procured approximately 0.97 mt of coke during 2013-14 from other sources, including our sister SAIL units. During 2014-15, we expect to procure 0.6 mt from outside, all of which will be from our sister SAIL units where excess capacity exists.
What is your own coke making capacity? Any plans for expansion there?
Our installed coke-making capacity with 8 batteries is around 3.5 mtpa; however, as we are passing through a phase of comprehensive repairs, only six batteries are available to us. Again, in fiscal 2014-15, we will undertake comprehensive repairs in another battery, which will reduce our battery availability to 5 for around 6 months.
The proposed 7-metre tall top-charged conventional battery will have a capacity of approximately 0.8 mtpa.
What kind of steel production targets are you setting for yourself considering the demand potential in FY’15? How do you see the domestic steel demand scenario in 2014-15?
We have a target of 4.05 mt of crude steel and 3.74 mt of saleable steel for 2014-15. The domestic demand situation should improve over 2013-14, but of course there is no guarantee.
How do you see the demand for flat products in the coming years especially when demand from the automobile and white goods sector is almost stagnant?
I think this dip in demand for automobiles and white goods is a temporary phenomenon, and with improvement in the overall economy, these sectors should be the first to recover in the overall steel market.
Bokaro Steel Plant is a major producer of specialty steel. Who are the important buyers?
The Indian Railways, Bhushan Power & Steel Ltd, Mauria Udyog Ltd and IOCL are some of our largest buyers. There are some other important customers like the Defence, Ashok Leyland and RSB Transmission in terms of their requirement of special grades.
Similarly, who are your major buyers of HR and CR products?
Bhushan Power & Steel Ltd, Jindal Industries, Jindal Pipes, Surya Roshni, Surya Global and PDP Steel are some of our major buyers for HR products. In the CR segment, some of our major buyers are IOCL, Dimple Drums and Balmer Lawrie.
Last year, during the depreciation of rupee, there was spurt in export of plates from India, especially by BSP. What was the situation like at BSL and what is the current position?
Exports from BSL saw a 35 percent increase in 2012-13, and a further 4.2 percent in 2013-14 over the respective previous fiscal. For BSL, this increase was across the product basket rather than in plates alone.
SAIL is planning to reduce flat steel’s share to 47% from the current 59% and increase long steel production to 53% from the present 41%. What impact will this have on BSL? Will there be any plan to produce long products at BSL in future?
Although the share of flat products will come down, the overall volume is going to expand. This is primarily because our plants at Bhilai, Durgapur and Burnpur cater primarily to the long products market. Flat products are to be produced from Bokaro and Rourkela only.
What will be the new product mix post expansion?
CRM-III will be commissioned with facilities like thinner gauges upto .25 mm and will be able to roll for auto body and white goods. This state-of-the-art 1.2 mtpa shop is going to be the flagship of our current phase of expansion. The product mix under Vision 2025 will also consist of flat products, but the exact product basket will take time to shape up.
SAIL is planning to increase its share of value-added products to 55 percent from the present 39 percent. What is the current situation in BSL and will be in the coming days?
We have kept a target of 24 percent of value-added products in our total production for 2014-15.
CSR has emerged as a talking point in recent years. What special initiative is being taken by BSL in this respect?
There need not be corporate differentiators in CSR, as the profile of the beneficiaries in our society would roughly be the same. We have of late focused more keenly on the sustainability of CSR efforts.
We undertook a baseline survey of the peripheral areas through an independent agency, which will form the basis of our interventions. In the last fiscal, we initiated two projects of skill development to promote self-employment.
One of these projects, that trained local women in silk yarn spinning, was implemented in collaboration with JHARCRAFT, an organ of the Jharkhand government engaged in promoting local art and craft.
The other project with INSDAG trained local youth in steel fabrication, helping them develop small and micro projects, and did hand-holding in terms of securing bank loans and setting up their fabrication units. The regular projects in the fields of education, healthcare and peripheral development are being continued.
What kind of challenges you are facing at Bokaro at present?
It is just a culture issue at Bokaro not so much in terms of technology etc. The culture here is guided by different types of loyalties and biases. Earlier, we had a large number of employees. Now as the number has declined things have changed. At present, my team and I are trying to resolve these issues by communicating more with the employees.
Moreover, since there are lesser number of employees it is necessary to communicate on a regular basis not only on specific issues but also on policy issues, operations and projects. I have a feeling that people here will deliver whatever is required of them and I do not need consultants.
If the Bokaro plant has turned around from being loss-making to profit making, the people here are mainly behind this achievement. I must give them credit for this and they will continue doing this if we break down these barriers. This is my personal feeling and I will keep working at it.
What initiatives have you taken in this regard?
We are communicating quite extensively, with various sections –junior executives, freshers, workers etc along with one of my executive directors almost every fortnight. This helps them communicate with me without any barriers in-between, no filters, no fears or reprimands.
We have done some sessions with GMs and planning engineers to find out what’s wrong with the planning and what corrective actions need to be taken. If something is not right then we call the HODs to find out what led to the delay and take corrective actions.
Things are moving and I am very hopeful. I had taken two years from my steel secretary to turn around the plant and it has turned around. So I am satisfied. We are at least on the right track.
How different is BSL from other plants of SAIL?
At BSL, the environment is rather different. People are respectful but laid-back, almost zamindari in their approach! The sooner you come out of that culture and adopt a professional approach the better for the plant.
How do you see the plant moving ahead under your stewardship?
I have another three years to go so I guess we should look at `1,200-1,500 crore of profit from the present level of say `100 crore. This plant has achieved `2,000 crore. So I am looking at what
improvement can be made at the plant. We are looking at improving the automation levels and need to take stock of our infrastructure and equipment. We have come to terms with what were the barriers for growth. We have started working on that. It doesn’t depend on whether I am there or not. If people start to realize their shortcomings then things will start moving.
Any other issue bothering BSL?
The land issue is likely to be a big problem for the industry. Also, there a strict labour laws. All major industries are increase the percentage of contract labours but it’s problem in our company. Unless people look at solving this problem, it will remain a barrier.
What about the R&R policy?
The problem is people are coming out with wrong interpretation of the policy and there are talks about displaced people in Bokaro even after 50 years. The policy would be burdensome for industry but the government also has to extend its support to the industry. There are certain limitations of working in a PSU as you are dealing with public money. You will have to justify your moves. It takes time to master this process.