New Delhi: Facing a twin problem of dip in demand and prices leading to a glut in almost all categories of products, steel giant Steel Authority of India Limited (SAIL) has constituted five task forces to review the market and take corrective steps.
“A delay in decision would lead to piling up of inventories further and the organisation would have no option but to cut production if the slump in demand continues for some more time,” government sources said.
“As part of their agenda, five task forces comprising directors of SAIL would suggest re-orientation of product-mix to match the supply in tune with the demand of products,” sources said, adding that this would enable the steel major to design production capacity for various products accordingly.
Though confirming the constitution of task forces, SAIL officials denied that it is a precursor to cutting down the production.
“They (task forces) would review the demand scenario for our products and help re-orient the products-mix. They would also look for oppurtunities to procure cheaper raw materials like coking coal, limestone, dolomite, ferro manganese and refractories in the present downturn market,” a senior official in the Navratna PSU said.
SAIL Chairman S K Roongta had during the recent metal conference said that the company’s production would be market oriented and in accordance with the demand.
This, however, was in contrast to Steel Secretary P.K. Rastogi’s statement that SAIL may cut production of some of its products due to the declining demands.
Owing to slackening requirement of the commodity from consuming sectors, SAIL’s steel offtake dipped by over 37% last month. The total inventory piling up across its plants and warehouses has touched about a million tonne.