India: Neelachal Ispat Starts Billet Production at Kalinganagar Plant

In a major breakthrough, MMTC promoted Neelachal Ispat Nigam Ltd (NINL) has commenced production of steel billets from its factory at Kalinganagar in the eastern state of Odisha.

Foray into billet manufacturing is part of NINL's diversification plans and also a step towards the plant's turnaround to clock profits. NINL, the largest producer cum exporter of pig iron has plans to convert sizeable billets into TMT bars and wire rods.

"NINL is in last lap towards achieving the turnaround of the plant. The steel market is improving and we expect to earn maximum net margin on Billet by reducing the cost of production. Shortly the first export consignment of Billet will be sent. There is also plan for TMT and Wire Rod soon. The next target would be operation of the captive mines at Koira which is expected towards the end of the current fiscal. This will be a game changer for the company", said SS Mohanty, vice chairman & managing director at NINL.

NINL in April this year, had commissioned the capital repair work of its blast furnace with a capacity to produce 1.1 million tonnes per annum. The overhaul exercise spanned over five months.

Post the capital repair work, NINL is clawing towards profitability, staging a rebound from its stressed finances. Riding on the escalated production after the Capital Repair, the company generated EBIDTA (earnings before interest taxes, depreciation and amortization) of nearly Rs 4,000 per tonne of Pig Iron during the April-August period of the current fiscal. In the comparable period of last financial year, the company's performance was Ebitda-negative.

NINL, promoted by MMTC Ltd, Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol) & Odisha Mining Corporation (OMC), has set up an 1.1 million ton integrated Iron and Steel plant at Kalinga Nagar, Odisha. Presently the products are Steel Billets, Pig Iron and LAM Coke along with Nut Coke, Coke Breeze, Crude Tar, Ammonium Sulphate, Granulated Slag, etc.

After turning EBIDTA positive, NINL has gained a toehold in the path of turnaround and expects to turn in net profit after commencing operations from its captive iron ore mines at Koira. The steel PSU has already initiated the process to select Mine Developer cum Operator (MDO) for the captive mines. Mining operations are set to begin by the end of this fiscal.

MMTC has the biggest equity in NINL with a holding of 49.9 per cent.