SEFI seeks to integrate three companies with SAIL for synergy

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SEFI seeks to integrate three companies with SAIL for synergy

Mid Corporate 05 Jul 2024 10:59 AM IST Economic Times

The Steel Executives Federation of India (SEFI) has urged the steel ministry to merge state-run Rashtriya Ispat Nigam Limited (RINL), Ferro Scrap Nigam Limited (FSNL), and the Nagarnar steel plant with the Steel Authority of India Limited (SAIL), combining the expertise of each firm to form a mega public sector undertaking.

The government was urged to consider "the merger of these national assets instead of privatisation" by the federation, which oversees SAIL, RINL, MECON Ltd., NMDC Iron and Steel Plant, and National Mineral Development Corporation.

A submission to the government stated that the combination is anticipated to assist SAIL in meeting its 35 million tonnes (MT) capacity expansion objective by 2030 due to the particular capabilities of the enterprises. These companies are dealing with issues such as a need for more human resources and raw supplies, which threatens their financial viability. Plenty of raw materials are available for the 3 MT Nagarnar Steel Plant in Bastar, but it only has 200 officers and 1,000 workers to run it.

To top things off, MECON Ltd has been requested to run the factory, "but MECON has no prior experience in steel plant operations," according to the SEFI. RINL, it said, has a total production capacity of 7 MT, but its capacity utilisation is around 60%, owing to a lack of iron ore and other raw materials. "RINL has human resources available with skilled and technical capabilities, but as it doesn't have its iron ore mines, shortage of raw materials and compulsion to buy raw materials at higher prices has hampered the company's ability to make profits," said the submission.

The federation also questioned the rationale behind the FSNL disinvestment, as the entity has reserves of ₹170 crore, movable assets amounting to ₹100 crore and a work order of more than ₹1,000 crore.

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SEFI seeks to integrate three companies with SAIL for synergy

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