Excess supply, fluctuating nickel prices, and dumping of stainless steel by China have dented the competitiveness of domestic stainless steel manufacturers, including the Salem Steel Plant (SSP).
“The cost of capitalisation and interest burden along with increase in the cost of power have severely dented the market competitiveness of ‘Salem Stainless’ in spite of notable improvement in techno-economic factors and various cost cutting measures implemented by the plant. The new initiatives have resulted in a significant improvement in the volume of sales and turnover, but the margins are yet to rise to the expected level in the present scenario,” an official said.
To reduce loss, SSP has drawn up plans to enter niche segments. It has also decided to focus on products that will fetch higher margins and introduce value added stainless steel products through outsourcing.
The capacity of SSP has been increaded to 3.64 lakh tonnes (hot-rolled products 1.94 lakh tonnes and cold-rolled products the balance) after the expansion plan in 2010.
During April-November this year, SSP sold 1.50 lakh tonnes of carbon steel against the annual sales target of 2.55 lakh tonnes.
Stainless steel sales stood at 86,194 tonnes in the said period against 1.45 lakh tonnes.
“We have good order book position for hot- and cold-rolled products till March next. Amidst stiff competition, we have received orders from the Railway Board and the Government Mint for the supply of coinage grade strips and coin blanks. This will keep us going for the current fiscal,” the official said.
