VIZAG STEEL - YESTERDAY, TODAY AND TOMMORROW

The momentous decision to establish a Steel Plant at Visakhapatnam was announced in the Parliament in 1970 by the then Prime Minister, Smt. Indira Gandhi.   The foundation stone for this massive project was laid in 1971.   The Detailed Project Report was prepared in 1977.   However, it was only in 1979 with the Government of erstwhile Soviet Union offering techno-economic cooperation, the cabinet approved the proposal for setting up of an integrated Steel Plant at Visakhapatnam .

Following this, the comprehensive Revised Detailed Project Report was prepared adopting latest technologies available.

The 7 M tall Coke Ovens with Dry Quenching facility, the      3,200 cu.m. Blast Furnaces and the 100% Bloom Casting technology and fully computerized Rolling Mills are only some of the unique features of VSP’s most modern assembly of global technologies.

However, the journey of Vizag Steel has not been very smooth.   22 long years between conception and commissioning resulted in an increase of project cost to over Rs.8,500 Crores.    The implication of this was very high interest and depreciation charges, resulting in accumulated loss of Rs.2033 Crs., even before start of the operations.

Distant raw material linkages coupled with lack of captive mines for major raw materials, have resulted in high raw material costs too.

Also, by the time the plant started its full-fledged operation, it had to operate in the decontrolled regime of iron & steel.   After a short period of operations, tumultuous times were experienced due to internal technological problems like the coke oven set back.                                     

All these problems led VSP to its nadir point – it’s reporting to BIFR.   After that, the plant has exhibited dramatic                   turn around and has been making profits continuously for the past 4 years.

Presently the Plant is operating at higher efficiency levels surpassing the rated capacities thus achieving 4.15 Mt of Hot Metal, 3.6 Mt of Liquid Steel and 3.2 Mt of Saleable Steel i.e 122%, 120%   & 122% of the respective rated capacities during 2005-’06.  

RINL, in spite of operating at 120% of its rated capacity, registered 2% growth in saleable steel production and the total sales have been improved by 4%.   The Organization has become net positive in 2005-06, having wiped out all accumulated losses and registered Rs.1251 Crores net profit after taxes. The efforts have been duly recognized both by the Government and the society and a number of accolades have been bestowed, significant among them being the National Energy Conservation Award for the 6^th time in concession, the National Award for Excellence in “Water Management, the National Award for Excellence in Cost Management, the QCFI Award and the Viswakarma Puraskars.  

Also, the prestigious Prime Minister’s Trophy award was bestowed on the Vizag Steel for the year 2002-03.

In line with the vision in National Steel Policy envisaging         110 MT steel by 2019-20, Vizag Steel is also planning to expand it’s capacity.   Considering the buoyancy in domestic steel market for long products, which is the product mix of VSP and the high acceptance of VSP’s brand image in the market, an expansion plan has been proposed.   The expansion plan of doubling the capacity of the plant has been cleared in a record time of 10 months and the entire Vizag Steel collective is totally geared up for completing the expansion in the stipulated      36 months.   The consultant is in place and the funds are in hand.   The expansion should give a strong footing for VSP’s growth.

The expansion programme   is progressing well as per   plans and the present focus is on creating an enabling infrastructure such as roads, water, power etc., for smooth execution.   Also thrust is on finalization of the specifications and placement of orders.   To leverage from our brand leadership in the long segment category, expansion has been cast to enhance volumes in the long product category.   A seamless tube mill is also been envisaged to reduce the dependence on imports in view of the huge requirement by the oil and gas sector.

The envisaged expansion of the Plant’s capacity by 2008-09 is as below:

1. Hot Metal                  -   6.50 Mtpa
2. Liquid Steel               -   6.30 Mtpa
3. Saleable Steel           -   5.72 Mtpa

The following major facilities are proposed to be added under expansion stage.

    1.    Blast Furnace    -   3800 M³- 1 No.

    2.    Sinter Plant

1. Sinter Machine No.3 – 400 M²- 1 No.

    3.    Steel Melt Shop No.2:

1. LD Converters 150 M³Cap       - 2 Nos.
2. 6 Strand Billet Casters            - 2 Nos.
3. 6 Strand Round Caster            - 1 No.
4. Secondary Steel Making Facilities

    4.     Rolling Mills :

1. Wire Rod Mill No.2                 -   600,000 TPY        
2. Special Bar Mill                     -   750,000 TPY         
3. Structural Mill                        -   700,000 TPY
4. Seamless Tube Plant              -   300,000 TPY

VSP will enhance the volume of production in long products segment in view of Brand image.   In order to diversify the product mix and help reduce the dependence on import of pipes in oil and gas sector, a seamless pipe mill is envisaged.

1. Wire Rod (Plain)               -   5.5 mm to 20 mm in coils
2. Special Bars (Plain)          -   16 mm to 40 mm – in coils and straight lengths
3. Structurals
4. Seamless pipes                -   139 mm to 365 mm
5. Semis                             -   Blooms , Billets

The Project is estimated to cost Rs.8,259 Crores (Base   IV Qr.2004).