OST Business Bureau
Ranchi, Sep 13:
Public sector giant Steel Authority of India Limited (SAIL) has launched a special cost cutting initiative named Cost Optimization Initiatives of SAIL (COIS) outlining the road map for achieving an overall saving target of around Rs. 5000 crores during the next three years.
The four thrust areas identified for continual cost reduction under this special initiative are optimization of input, improvement in the operational efficiency by optimally utilizing available assets, quick stabilization of the newly commissioned units and reduction in overhead costs and enhancing employee productivity.
Integrated steel plants and units of SAIL presented identified potential cost drivers and elaborated their strategy for cost optimization at an apex Strategic Confluence on Cost Control and Cost Competitiveness organized by SAIL at its Management Training Institute, Ranchi on September 11 and 12.
CS Verma, Chairman, SAIL, highlighted the challenges before the organization due to the prevailing market conditions and intense competition. He urged participants to think out of the box and walk the extra mile to enhance competitiveness of the company. He advised senior officials to lead from the front for achieving the Company’s goals.
All the Functional Directors, Chief Executive Officers of the Integrated Steel Plants and other top officials attended the Confluence.
Indian steel companies are facing the dual challenge of high cost of production on one hand and lower sales realization on the other. The cost of production is being driven up by the volatility in the prices of coal, higher railway freight, power tariff, royalty on minerals, depreciation of the rupee, etc. while prices are flat due to prevailing market conditions leading to severe pressure on margins.