|SAIL CMD PK Singh|
In line with the consistent efforts for enhancing productivity, improving manpower profile, rationalisation of manpower and optimisation of manpower cost, the India’s largest steelmaker implemented the VRS during the period from May 1 to June 30, 2016 at all its plants units, it said in a BSE filing.
“Voluntary retirement of total 1,038 numbers of employees has been approved under this scheme. The one time financial implication for the scheme works out to Rs 213 crore (VR Compensation), with envisaged savings of Rs 103.80 crore per annum,” it added.
The VRS was applicable for those employees who...
have worked for at least 15 years and whose minimum age is 50 years.
The compensation will consist of the salary of 45 days for every completed year of service or the salary an employee would draw at the prevailing level for the number of months’ of service left, whichever is less, says the PSU’s VRS document.
The state-run company has around 86,000 employees across its 10 plants spread across the country.
The Maharatna PSU has been trying to bring down its operational costs in a bid to cut losses amidst tough domestic market conditions due to cheap imports that are adversely impacting the margins of domestic steel producers. SAIL has reported a standalone net loss of Rs 1,230.93 crore for the quarter ended March 30, 2016 hit by challenging market conditions and declining sales realisation. In the last year it reported a profit of Rs 334.22 crore.
Its total standalone income declined 2 per cent to Rs 11,371.66 crore in the January-March quarter of last fiscal against Rs 11,590.55 crore during the same quarter of 2014-15. The PSU registered a net profit of Rs 2,093 crore in 2014-15 compared to Rs 2,616 crore in the previous financial year.
The PSU reintroduced the voluntary retirement scheme (VRS) which came into effect from May 1. It was almost after six years that SAIL came out with the VRS offer. The VRS scheme launched by the PSU in 2001-02 continued till 2008-09. When the scheme was launched, SAIL had strength of more than 160,000 employees and the manpower cost accounted to nearly 16 per cent of the company’s gross sales — the highest among the steel makers. After VRS and natural separation of employees, its manpower has been reduced to 88,655, of which 13,968 are executives and the remaining 74,687 being non-executives.
SAIL is India's largest steel producing company. With a turnover of Rs. 50,627 crore in the year 2014-15, the Maharatna PSU has five integrated steel plants, three special plants, and one subsidiary in different parts of the country.
After PK Singh assumed charged as the chairman of SAIL, the goals of the PSU were modified. The Maharatna PSU is targeting steel production at 17 million tonnes for FY17 and 20 million tonnes for FY18. The PSU also plans to target 70 percent sales in the northern and eastern regions and increase its presence in the Make in India sectors like defence, aerospace and nuclear power. Apart from this, the company intends to sell idle assets, and reduce inventories of steel.