Centralised marketing operations of steel PSUs mooted to help VSP tide over losses

The Steel Executives Federation of India (SEFI) has mooted a centralised marketing system for all state-owned steel majors like Steel Authority of India (SAIL), NMDC Steel Limited (NSL), and Rashtriya Ispat Nigam Limited (RINL) as a temporary measure in order to tide over the losses being incurred by the PSUs.

The proposal, made by SEFI to the Union Steel Ministry recently, assumes significance in view of the growing calls for the merger of RINL-Visakhapatnam Steel Plant (VSP) with SAIL.

SEFI has been actively advocating for the merger of steel PSUs for the last three years . While the merger proposal is being discussed at the highest levels and the process is time-consuming, SEFI is keen on immediate centralisation of marketing operations of RINL, SAIL and NSL.

If this happens, the marketing activities of SAIL, RINL and NMDC Steel Limited (NSL) will be conducted through a single window. The objective of the proposal is not to encourage competition among steel PSUs in selling their steel products in the domestic and international markets, and together compete with corporate steel units.

This will help PSUs like RINL to tide over financial problems to some extent till the merger takes place. Technology transfer also happens among steel PSUs which will help in manufacturing of new products and improve quality.

With this new proposal, any steel PSUs can market their products available across the country through a single window.

Confirming the proposal to The Hindu, SEFI executive members K.V.D. Prasad (Joint Secretary) and K. Chandra Rao (Dy General Secretary, NCOA) said, “A proposal has been made to centralise the marketing activities of SAIL, RINL and NSL. It is still under discussion. The proposal will reduce the cost of logistics like transportation of steel to the customer and also reduce the burden on marketing of the products by the concerned PSUs. However, our ultimate goal is merger of steel PSUs.”

The move to centralise marketing operations will be beneficial for state-owned steel PSUs as the corporate sector is the only major stakeholders in terms of production and marketing. Of the 150-160 million tonnes of steel produced in the country per annum, only 30 million tonnes of steel is produced by state-owned PSUs. Another RINL official opined that if steel production is completely privatised, there will be an increased burden on government infra projects like highways, bridges, etc., ultimately affecting the common man.