SAIL saves Rs 900 cr through cost reduction

NEW DELHI, APRIL 21: Steel Authority of India Ltd (SAIL) has managed to save more than Rs 900 crore during 1998-99, including a saving of...

NEW DELHI, APRIL 21: Steel Authority of India Ltd (SAIL) has managed to save more than Rs 900 crore during 1998-99, including a saving of Rs 216 crore on coking coal import bill, as part of the state-owned steel giant’s efforts to cut costs to reduce losses.

"SAIL procures coking coal of about Rs 1,800 crore through imported sources. Due to fall in international coal prices, SAIL negotiated with every long-term contractor to take the advantage and got a reduction of over 15 per cent on contract price during last year", SAIL sources said.

Being a bulk buyer of several items, SAIL is in a position to use its bargaining power in getting input material at lower cost, the sources added.

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When contacted SAIL chairman Arvind Pande confirmed and said "it is absolutely clear that for growth, companies must focus inwardly on continuous process of cost-reduction. Our success in this area is mainly due to participation of all employees particularly at the shop-floor level."

For the second consecutive year, SAILhas managed to save and reduce cost to neutralise the sluggish market, fall in net sales realisation and increasing input cost but only to some extent.

In 1998-99 SAIL saved Rs 902 crore as against Rs 702 crore saved in 1997-98 registering a growth of 23 per cent.