State-owned Steel Authority of India Ltd (SAIL) will not close down three of its loss-making specialty steel plants if the company does not find buyers for these units, its chairman Anil Kumar Chaudhary said.
Earlier, the Center had authorized the full sale of Alloy Steels Plant (ASP) in West Bengal, Salem Steel Plant (SSP) in Tamil Nadu and Visvesvaraya Iron and Steel Plant (VISP) in Karnakata, as the cumulative losses in these units amounted to more than Rs 370 crore in the last fiscal year.
In July last year, the Department of Investment and Public Asset Management (DIPAM) invited tenders to sell 100% of the shares in the three Steel Authority Units of India Ltd. However, the last date for the submission of express interests has been extended three times.
SAIL Chairman Anil Kumar Chaudhary said, "The divestment process is underway. We will not close down these special units," when asked whether the company will consider shutting down these plants if the steel manufacturer does not find suitable buyers for them.
Three units operate on demand but operate below their maximum capacity, according to SAIL officials, adding that the total workforce in these facilities is approximate 1,972.
"The bids received are determined by the transaction advisor-SBI Capital Markets Ltd," the company said.
In 2012, SAIL formed a joint venture with Japan's Kobe Steel to manufacture iron nuggets at ASP in Durgapur, but the project did not move as it wished.
Secondary steel consumers wondered why the public sector company had planned to sell its three units when the Center set up a "Purvodaya Project" aimed at accelerating the growth of Eastern India through an integrated steel center.
SAIL claimed that this was a bold step towards promoting growth and development in the region.
The Eastern belt has the potential to add more than 75% of the country's incremental steel capacity as envisaged by the National Steel Policy. More than 200 million tons are expected to come from this area alone out of the 300 million ton potential by 2030-31.
SAIL has introduced a special incentive scheme aimed at providing the required impetus to local Micro, Small and Medium Enterprises based in the districts where the steel mills are located. Incentives are projected to provide relief of Rs 700-800 per ton of steel to small and medium-sized enterprises under the scheme.