The economic slowdown has affected the production of every sector. Steel Authority of India Ltd. (SAIL) will not shut down its three plants which are currently loss making steel plants if the company fails to find buyers for these units. The center had approved the outright sale of Alloy Steel Plant (ASP) in West Bengal, Salem Steel Plant (SSP) in Tamil Nadu and Visvesvaraya Iron and Steel Plant (VISP) in Karnataka, as accumulated loss in these units was over Rs 370 crore in the last fiscal. Last year in July, the Department of Investment and Public Asset Management (DIPAM) had invited biddings from buyers for 100 percent stake sale of all three units of SAIL. The last date for submission of interest was extended thrice already.
Claiming the process divestment is still ongoing, the company is not going to shut these units. The company is only to shut down if there are not suitable buyers for them. SAIL has confirmed that the plants are functioning as per demand but are operating below their optimal capacities. The company also confirmed that manpower in these facilities is around 1972. The bids received by the company to the day are under evaluation by the transaction advisor, SBO Capital Markets Ltd.
As the center is gearing up for Mission Purvodaya aiming at accelerated development of eastern India through an integrated steel hub, the sector is wondering why the public sector company has planned to sell its three units? SAIL has claimed it as a visionary step. There is potential to add more than 75 percent of the steel capacity envisioned by the National Steel Policy in the eastern parts of India. The estimated figure is more than 300 million tons of capacity by 2030-31.
