|
|||||
|
FOR the public sector undertakings (PSUs) under the Ministry of Steel, it has been a rise from the ashes, literally. And the most spectacular turnaround has been made by Steel Authority of India Limited (SAIL), the leading enterprise under the Ministry. Five years ago, who could have thought that SAIL - with huge accumulated losses and hovering below par at around Rs.4.50-6.50 a share in the country's bourses - would not only wipe out most of its losses but also earn substantial profits to be able to pay dividend and rule firm at around Rs.84-92 a share.
A crucial factor in this turnaround was the firming price trend in the international markets owing to the gradual increase in the global demand for steel and its prime raw material, iron ore. This came on the back of a surge in the demand for steel as a key construction material in China, which is preparing for the Olympics.
Increase in the domestic demand for steel also went a long way in transforming the health of the state-owned steel companies. Profit before tax (PBT) figures of the steel PSUs rose sharply over the past two to three years. There was also a significant escalation in their contribution to the exchequer, by way of dividends to the government and taxes.
Apart from the five enterprises bunched as the `Bird Group of Companies' under its administrative charge, the Steel Ministry has 10 major PSUs under its fold. According to the latest data compiled by the Ministry, the contribution of all these companies to the exchequer by way of excise duty and all other taxes went up from Rs.4,992.45 crores in 2003-04 to Rs.8,185.67 crores in the following year and to Rs.11,540.39 crores in 2005-06. Leading the pack was SAIL with payments of Rs.4,229 crores in 2003-04, Rs.5,515 crores in 2004-05 and Rs.7,971 crores in 2005-06, followed by Rashtriya Ispat Nigam Ltd. with contributions of Rs.898.08 crores, Rs.1,160.24 crores and Rs.1,852.32 crores, respectively, during the three years.
Likewise, the total dividend paid by these companies to the government also surged from Rs.100.44 crores in 2003-04 to Rs. 928.54 crores in 2004-05, and nearly doubled to Rs.1,792.25 crores in 2005-06. Thus, the total contribution through taxes and dividends paid by all the companies under the Ministry went up from Rs.5, 092.89 crores in 2003-04 to Rs.9,114.21 crores the following year and to Rs.13,332.64 crores in 2005-06.
The PBT figures of the steel companies tell the same story. Leaving aside the four Bird Group companies, which incurred losses in both the years, the other PSUs under the Ministry jointly earned a total PBT amounting to Rs.5,622.37 crores in 2003-04, and this almost doubled to Rs.11,569.29 crores in 2005-06 in two years of the United Progressive Alliance (UPA) regime.
These companies, however, include a Bird Group company, Orissa Mineral Development Company Ltd. (OMDC), whose PBT declined from Rs.236.38 crores in 2003-04 to Rs.188.88 crores in 2005-06.
SAIL tops the list here too; its PBT more than doubled from Rs.2,628 crores in 2003-04 to Rs.5,706 crores in 2005-06, followed by RINL with PBT figures of Rs.1,547.18 crores and Rs.1,889.51 crores during the two years, respectively.
The two leading ore mining PSUs - National Mineral Development Corporation Ltd. (NMDC) and Kudremukh Iron Ore Company Ltd. (KIOCL) - also fared well during the period. While the PBT of NMDC increased from Rs.670 crores in 2003-04 to Rs.2,883.82 crores in 2005-06, that of KIOCL went up from Rs.406.40 crores in 2003-04 to Rs.548.10 crores in 2005-06, having achieved a high of Rs.1,114.61 crores in the previous year.
In the current fiscal too, the robust trend is maintained, as can be seen from the PBT figure of Rs.4,000 crores for SAIL during April-September, while RINL's PBT also touched Rs.904 crores during the six-month period. NMDC has already earned a PBT of Rs.1,522.57 crores for the half year of the current fiscal, though the PBT of KIOCL has slumped way down for the same period.
Explaining the sharp fall in KIOCL's PBT from Rs.342 crores in the six months of 2004-05 to a mere Rs.7.96 crores during April-September this fiscal, the Ministry noted that it was on account of "the cessation of mining of iron ore from the Western Ghats, pursuant to orders of the Hon'ble Supreme Court of India, based on environmental concerns".
Looking forward to a decade or more of high growth, SAIL and RINL, the two primary steel producers in the public sector, have embarked on major expansion and modernisation plans to maintain, if not increase, the PSU share in steel production, an area in which private players now have a larger share.
While RINL is in the process of expanding its production capacity from about three million tonnes to 6.3 million tonnes in the next three years, SAIL is all set to carry out its `Corporate Plan 2012'.
Setting itself on a growth track under its corporate plan announced in July 2004, SAIL has been making steady progress in launching various projects. Having become a "virtual debt-free" company, the steel behemoth plans to increase its annual hot metal production capacity from 13 million tonnes to 22.9 million tonnes by 2011-12, with an envisaged investment of about Rs.37,000 crores.
Printer friendly
page
|
