Now, steel companies struggle with labour shortage
Major steel companies that curtailed operations in the wake of the 21- day nationwide lockdown to contain the spread of coronavirus disease (Covid-19), are now grappling with a shortage of labour.
While t he Centre and states have ensured unhindered movement of trucks, a major challenge is the shortage of manual labour for loading and unloading trucks. As a consequence, both inputs and finished goods are getting stuck. Most major steel companies are operating at around 40-60 per cent production capacity or lower, and it is proving a challenge to continue even at that level.
Sources close to Steel Authority of India (SAIL) said, the movement of trucks had eased but people were not available for loading and unloading trucks at the warehouses and public sidings. Last week, SAIL announced temporary disruption at its plants because of Covid-19.
The public sector steel major is currently operating at 60 per cent production level and will scale down gradually, they said.
Sources in the other steel PSU, Rashtriya Ispat Nigam (RINL), said that in the unprecedented situation movement of finished products was affected for a variety of reasons like placement of rakes at public siding because of congestion, restriction of movement from public siding to stockyard or customer destination. At some places, there was shortage of l abour, depending upon t he regulation and restrictions put by local administration, RINL said. But on the raw material input side, as of now, there was not much problem.
With the curtailed manpower and advisory from Ministry of Health & Family Welfare and district administration, RINL, too has brought down production by temporarily putting down one blast furnace. Capacity utilisation is around 60 to 65 per cent at present, according to RINL sources.
Since the lockdown was announced, most major steel firms — including JSW Steel and Tata Steel — have cut production. Tata Steel announced on Wednesday that it had started reducing production levels at its integrated steel facilities in Jamshedpur, Kalinganagar, Angul (Tata Steel BSL) and Gamahria (Tata Steel Long Production) and operations in the downstream facilities had been suspended and put on care and maintenance mode. Arcelormittal Nippon Steel India is operating at a bare minimum production level.
Shutting down the blast
■ Shortage of labour for loading and unloading trucks
■ Restriction of movement from stockyard or customer destination
■ So, both input materials and finished goods are getting stuck furnace, however, is not an option as restarting would take a month or month-anda-half. Additionally, it could cost ~250 -300 crore, said sources.
The central and state governments have clarified that mines, steel, coal, power fertilizers are essential services and process industries where continuous operations of the plant facilities are important and, hence, exempted from the lockdown.
V R Sharma, managing director of Jindal Steel & Power, said the Centre’s decision to allow movement of trucks was welcome. He, however, said that there was a shortage of contractors and handling agents for loading and unloading material.
“They should be allowed to work at minimum strength,” said Sharma. “Gradually, some relaxations should be made to the lockdown. The time has come for targeted lockdown,” he added.
Some i ndustry sources also pointed out that even though movement of trucks had eased, truckers were not available i n adequate numbers.
However, apart from issues of logistics and labour, steel companies were also struggling with reduced demand, with most automakers suspending operations and construction coming to a near standstill.