VISL set to resume bar mill production by 15 August, amidst revenue loss and political controversy

The VISL reported losses in the last two financial years: ₹50.57 crore in 2022-23, and ₹35.88 crore in 2021-22.

ByMahesh M Goudar

Published Aug 07, 2023 | 9:00 AMUpdatedAug 07, 2023 | 9:00 AM

VISL entrance gate

The Visvesvaraya Iron and Steel Limited (VISL) in the Shivamogga district of Karnataka is gearing up to restart bar mill production — which was shut since January — by 15 August.

The move by the Steel Authority of India Limited (SAIL) — to begin the bar mill production in the century-old alloy steel plant — has been welcomed by the factory’s labour union.

Shivamogga MP BY Raghavendra — son of BJP veteran and former Karnataka chief minister BS Yediyurappa — announced: “The SAIL management has finally agreed to restart production activities at the VISL.”

Karnataka Chief Minister Siddaramaiah penned a letter to Union Minister of Steel Jyotiradtiya Scindia on 27 July, appealing to the Union government to take the initiative to modernise the VISL.

Even the VISL labour unions and local elected representatives were stressing the modernisation of the century-old alloy steel plant, which even now takes up production in the old method, for better operations.

The VISL reported losses in the last two financial years: ₹50.57 crore in 2022-23, and ₹35.88 crore in 2021-22.

Earlier this year (January 2023), the SAIL proposed the closure of the VISL under the disinvestment programme as it could not attract private investors.

This was severely criticised, and the labour unions launched an indefinite protest.

Following the talk of closing down the VISL, JD(S) supremo and former prime minister HD Deve Gowda wrote a letter to Prime Minister Narendra Modi to drop the plan of shutting down the century-old alloy steel plant, and highlighted the socio-economic consequences of the closure of the unit.

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VISL continues to incur losses

The century-old VISL has reported more losses than profits since its inception in 1923.

According to SAIL’s published annual audit reports: “The company incurred a loss of ₹55.57 crore by the end of 2022-23 fiscal year. The company reported a loss for the last three quarters.”

It added: “The company reported a loss of ₹6.84 crore by the quarter-end on 31 March, 2023. The company grossed a revenue of ₹310.84 crore in the 2022-23 fiscal year. It declared the company’s asset valuation of ₹238.26 crore and liabilities stood at ₹60.45 crore by the end of fiscal year 2022-23.”

It may be recalled that the company reported its first loss in 1928, within five years of the setting up of the plant.

After 1972, the company again reported revenue losses for many fiscal years. The declining revenue led SAIL to think of disinvesting in the VISL.

The company was again back on track with profits from 2004. Since then, the company witnessed many ups and downs.

“The resuming of the bar mill production has given us new hopes,” claimed a labour union leader.

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Contract workers eager

Since the bar mill production was halted, the contract workers have been getting only 13 working days in a month.

With SAIL announcing the resumption of bar mill production, the labourers are hoping for a 25-35 percent additional working days.

VISP Contract Workers Union general secretary and contract employee Rakesh Reddy told South First: “We welcome the government’s move to resume bar mill production. It gives a little relief to contract employees as 25-35 percent of working days are likely to be increased.”

He added: “For bar mill production, the company requires manpower of around 150-200. The number of working days will increase. At present, we are getting only 13 days to work in the VISL as only machine shops, structural shops and roll-turning shops are operating.”

He also said: “The Union government must modernise it to bring back the century-old steel plant to life. The production is still underway using old machines and methods.”

He added: “Apart from this, the government must also pace up its efforts to begin hot metal production. The government has already allotted mines in 2016 itself but it is yet to get mandatory clearance.”

Currently, around 1,350-1,400 labourers — including about 120 women — are working as contract employees in the VISL. There are 210 permanent employees and another 50-60 executives working at VISL.

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Production may resume by 15 August

Bar mill production at the VISL is likely to begin by 15 August, nearly seven months after it was halted, claimed officials.

The company stopped production in January 2023 after not finding enough work orders and suppliers for the raw materials.

Now, not only has the VISL got work orders but SAIL has also assured the supply of enough raw materials to begin bar mill production at the Bhadravathi plant.

VSIL General Manager (Personnel and Publications) Praveen Kumar told South First: “It has been revamped. There was no input available for the production. We depend on our sister unit SAIL for customers. We did not get work orders because of the unexpected geo-political developments.”

He added: “Now, we are positive. We have also been assured of supplying raw materials. The bar mill production is most likely to begin by 15 August. The production at the primary mill will also resume in the coming days.”

On hot metal production, he said: “It requires huge investment and requires raw materials like Blast Furnace to start the production. The state government has allotted 147 acres of mines in Sandur town of the Ballari district.”

He added: “The required clearances, including environment, are under process. We are also following up on the modernisation of the company. The private players have not shown any interest in investing in the VISL.”

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Election eyewash, says Congress MLA

Stating that Siddaramaiah had already written a letter to the Union minister for steel appealing for the investment to modernise the factory, Bhadravathi MLA Sangamesh termed the bar mill production resumption an “eyewash” ahead of the 2024 Lok Sabha elections.

Sanamgesh told South First: “As Lok Sabha polls are fast approaching, MP Raghavendra might have got this work done. It was the BJP government itself that had said it would close the factory.”

He added: “Now, to eyewash the labourers and their families, it is resuming bar mill production. We do not know how many days it will operate. The factory needs huge investment to modernise and to begin full-fledged production.”

He also said: “The Union government must give necessary clearance to begin mining operations at Sandur and hot metal production in SAIL. This initiative will bring back the glory of the VISL.”

Responding to this, Raghavendra told South First: “It is common that they [political opponents] will try to politicise this. I have continuously followed up with the Union ministers Amit Shah and Scindia to resume operations in VISL instead of shutting it down.”

He added: “The government, besides ensuring raw material supply, has also decided to resume bar mill production and the primary mill shop in the following days. This is a good development. I will also make it clear that the government has never issued a closure order of the VISL.”

On modernisation and hot metal production, he said: “The government called for bids twice, but no private players participated. Then, the government tried to get investment with public-private partnership but did not get any response.”

He added: “I am following up with authorities concerned to get the required clearance to start hot metal production.”