Indications of proactive steps by the State and Central Governments have instilled new hope among the beleaguered private sector iron and steel industries of the State including those of Sundargarh district who are hopeful of better days ahead.
Industry sources claimed that from 2,000, Odisha has become the largest sponge iron producer of the country having 104 sponge iron plants of which 45 are based in Sundargarh. But, due to staggering cost of iron ore over the past four years, the plants incurred huge loss affecting about 60 induction furnace units and 12 large steel re-rolling mills in the district.
Former president of Odisha Sponge Iron Manufacturers’ Association (OSIMA) Gouri Shankar Agarwal on Monday told mediapersons that a high-level meeting held under the chairmanship of Steel and Mines Minister Prafulla Mallick recently advised private iron ore mine owners to augment production and move out unsold stocks at a reasonable price.
The Government felt rise in production and dispatch of iron ore would additionally enhance Government revenue in shape of royalty and VAT. The Odisha Mining Corporation was also advised to augment iron ore supply to Odisha-based industries, Agarwal said. For global factors, sponge iron price has been reduced by `5,000 per tonne and iron ore price to `2,900 from `5,700 per tonne. Given the huge profit margin, iron ore cost should stabilise at `2,500 per tonne for survival of industries, Agarwal said.
Agarwal also lauded the State Government’s initiative to rationalise iron ore transportation cost and hoped the sick industries would bounce back shortly.
A few months back, a delegation of Rourkela Chamber of Commerce and Industry (RCCI) had impressed upon Union Finance Minister Arun Jaitley to ensure restructuring of loans and longer repayment period to help the battling industries survive.
According to sources, at least one sponge iron plant and eight induction furnace units in Sundargarh were dismantled and sold in scraps for loan defaults.
Local industrialists said rise in import duty by five per cent would help in curbing import of steel products, while the Centre’s decision to boost infrastructure sector would give rise to increased demand for steel and cement.
Source: New Indian Express
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