In the latest press release, the company’s average capacity utilization dropped to 76% in Jun’20, primarily due to a fall in production at Vijayanagar Works. However, in May’20 the company had increased the capacity utilization to 85%.
Meanwhile, the production across all categories witnessed a significant decline both on a quarterly basis.
Flat-rolled product- On a quarterly basis the output fell by 29% to 2.05 mn t in Q1 FY21 as compared to 2.87 mn t in Q4 FY’20. Further, the decline was 30% on a yearly basis when compared with 2.91 mn t in the Q1 of the previous fiscal.
Long product- The aggregated output for Q1 stood at 0.45 mn t, significantly down by 53% in contrast with 0,95 mn t in the preceding quarter. Similarly, on a yearly basis, the fall recorded was 57% as compared to 1.05 mn t in the corresponding quarter of FY ’20.
Crude steel- The producer’s output fell by 25% to 2.96 mn t in Q1, which was 3.97 mn t Q4 of the previous fiscal. Meanwhile, the same declined by 30% on a yearly basis as against 4.24 mn t in Q1 FY’20.
The reasons behind the significant fall in the quarter are:
* Increased threat of COVID infections- After the easing of lockdown restrictions for manufacturers, the Vijaynagar plant saw an increase in infection cases which led to lower production during the quarter. However, the company has taken requisite measures and adheres to the basic safety guidelines to be followed.
* Slow domestic market demand- The demand in the domestic market has remained weak since the initial announcement of lockdown in Mar’20. Since then the manufacturing sector and allied industries have suffered from the lack of manpower.
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