The Rashtriya Ispat Nigam Ltd, known as Vizag steel plant, has forged a deal with Jindal Steel and Power Ltd to get an infusion of working capital up to Rs 900 crore in a bid to propel sales revenue, monthly turnover and slash losses.
Vizag Steel Plant secures a Rs 900 crore working capital boost from JSPL to enhance operations and financial health.
The Rashtriya Ispat Nigam Ltd, known as Vizag steel plant, has forged a deal with Jindal Steel and Power Ltd to get an infusion of working capital up to Rs 900 crore in a bid to propel sales revenue, monthly turnover and slash losses.
The timely deal enables the steel plant to procure raw material and start consistent Blast Furnace-3 (BF-3) operations with the planned blowing-in scheduled on December 30 at a capacity of two lakh tonnes of hot metal per month, an official said here on Thursday.
"The arrangement with JSPL will ensure availability of about Rs 800 -900 crore for RINL in the form of working capital advance and raw materials required for consistent operation of BF - 3, against which RINL will be supplying about 90,000 tonnes of cast blooms every month from Steel Melting Shop-2 (SMS-2) of RINL," said Vizag Steel Plant's chairman and managing director (CMD) Atul Bhatt in a meeting with the trade unions.
According to Bhatt, the arrangement with the New Delhi-headquartered JSPL will power Vizag Steel Plant to generate additional revenue from increased sales of about one lakh tonnes, even after supplying the committed quantity to the former.
The CMD noted that the deal will raise sales turnover to around Rs 500 crore per month and also slash losses by about Rs 100 crore per month.
In view of this deal, Bhatt appealed to the trade unions to enhance production and solicited the entire workforce's support to ensure sustained growth and profitability.
Further, he clarified several queries raised by the trade unions and assured them that the steel plant's management is implementing the best initiatives for its sustenance and profitability.
The activation of BF- 3 has been positioned as a strategic move to optimise production capabilities and thereby contribute to the overall improvement of the steel plant's financial position, he said.