Public sector steel maker Neelachal Ispat Nigam Ltd (NINL) has forayed into TMT bar production. Production of the value added product has taken off via a conversion process from billets manufactured at its Steel Melting Shop (SMS) at its facility at Duburi in the eastern state of Odisha.
Branded as ‘TMT Smart Bar’, the product will soon make its entry into the market. Sashi Shekhar Mohanty, Vice-Chairman and Managing Director, NINL, said, “This will be a game changer for the company. In the coming time, the quantity of value added products will go up as NINL has invited ‘Expression of Interest’ for setting up of TMT bar-cum-rod mill.”
NINL has been making persistent efforts to stage a turnaround. Sufficiently leveraged and sustaining losses for five fiscal years in a succession, NINL showed signs of recovery in FY19 when it had turned EBITDA (earnings before interest, taxes, depreciation and amortisation) positive during the first half of last fiscal. Though NINL was capable of trimming its losses, net profit still eluded the steel PSU promoted by MMTC and two Odisha government controlled entities- Odisha Mining Corporation (OMC) and Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol). Central public sector enterprises like National Mineral Development Corporation (NMDC) and BHEL Ltd have minor equity participation.
But NINL is nursing hopes of a successful turnaround in this financial year by achieving a net profit. Its efforts have been anchored by successful completion of capital repair work at its blast furnace in April 2018. Moreover, to buttress its efforts towards turning profit, NINL resumed steel billets production in December 2018. NINL has already started exporting billets, an intermediate steel product expected to shore up its margins.
Plus, NINL is banking on starting mining from its captive iron ore lease at Koira, straddling mine rich Sundargarh and Keonjhar districts. Mohanty, the company’s MD feels this will be a game changer. At present, NINL has been sourcing iron ore to feed its steel mill from the market through MMTC. After the commencement of iron ore mining from Koira, it is estimated that NINL will save around Rs 300 crore each year.
NINL closed FY19 with net sales turnover of INR 2100 crore, marking a growth of 126% over FY18. With the addition of steel billets, TMT bar and wire rods to its product portfolio, NINL’s topline is only going to strengthen in the future.
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