The slowdown affects RINL production and sales
VIJAYWADA: Reflecting the general softening in the economy , resulting in less steel extraction, the state-owned company Ltd (RINL) has closed the fiscal year 2019-20 with a decrease of 24% compared to the previous year. Production at the onshore integrated steel plant also saw a drop of nearly 1 million in production.
RINL, which owns and operates the, recorded an income of Rs 15,800 crore in 2019-20, compared to Rs 20,839 crore the previous year. The company produced 4.46 million tonnes (mt) compared to 5 mt in 2018-19, a company spokesperson said on Wednesday.
The spokesperson cited slow market conditions in the first half of the year and the outbreak of the pandemic in the last quarter for performance.
RINL had started the last financial year with optimism, setting a sales target of Rs 25,000 crore. The company had achieved a gross margin of Rs 1700 crore in 2018-19.
The slowdown in the economy impacted the company’s production and sales so much that RINL had to carry an inventory of 6.8 lakh tonnes in August last year, against a normal inventory of between 3 lakh—4 lakh tonnes.
While the company did not send any of its 18,000 full-time employees on leave even as sales and production declined, in recent weeks it has had to reduce the number of full-time and contract workers who reported to work due to to Covid-19.
RINL also had to postpone the opening of its forged wheel plant at Rae Bareli in Uttar Pradesh due to the slowdown. The company had invested Rs 1.68 billion rupees in the installation of the Rae Bareli plant, whose total production of 1 lakh of wheels per year was to be purchased by him.