Chapter-3PROFILE OF

VISAKHAPATNAM STEEL PLANT

3.1 BACKGROUND

The government of India was for long deliberating to set up an integrated

steel in the southern part of the country. After lot of study and planning

Visakhapatnam shore based town was selected for the same. Selection committee

chose the site close to the Balacheruvu creek and the Prime Minister did the formal

inauguration on 20th January 1971.

The consultant M/s M.N. Dastur and Co., Ltd submitted a detailed project

report (DPR) for the plant with an annual capacity of 3 million of liquid steel in

October 1977.

The Russians examined the DPR prepared by Dastur and offered Economic

and Technical co-operation for the same followed by an agreement signed with

erstwhile USSR on June 12th 1979 for co-operation in setting up 3.4 MT integrated

steel plant at Visakhapatnam. A Comprehensive Revised DPR (CRDPR) was

revised by Soviet and Indian design organisation in 1980.

The project was estimated to cost Rs. 3897.28 crores based on prices as on

4th quarter of 1981. However on completion of construction and commissioning of

the whole plant in 1992 the cost is estimated to be Rs. 8,755 crores based on

prices as on 2nd quarter of 1994. Unlike other integrated steel plants in India

Visakhapatnam Steel Plant is one of the most modern steel plants in the country.

New technology, large-scale computerisation and automation etc., are incorporated

in the plant. To operate the plant at international levels and attain such labour

productivity, the total manning of the organisation has been limited to 17500

employees. The plant has a capacity of producing 3.0 MT of Liquid steel and 2.656

MT saleable steel.

3.2 MAJOR SOURCE OF RAW MATERIALS

S.No. Raw material Source1 Iron ore lumps and fines Bailadilla, MP2 BF lime stone Jagayyapeta, AP3 SMS lime stone Jaisalmer, Rajasthan4 BF Dolomite Dubai5 SMS Dolomite Madharam, AP6 Manganese Ore Chipurupalli, AP7 Boiler coal Talcher, Orissa8 Coking coal Australia

Table 3.1 Raw materials and their Sources

3.2 THE MAJOR PRODUCTION FACILITIES OF VSP

3.2.1RAW MATERIALS HANDLING

Some of the major raw materials required for the making of iron and steel

are iron ore lumps and fines, coking coal, limestone, manganese and dolomite.

VSP’s requirements are met by various mines located in the states of Madhya

Pradesh, Rajasthan, Orissa and Andhra Pradesh. VSP has its own captive mines

at Jaggayyapeta and Madharam in Andhra Pradesh for limestone and Dolomite

respectively. BF dolomite is obtained from Dubai and coking coal is imported from

Australia.

3.2.2COKE OVENS & COAL CHEMICAL PLANT

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Coking coal after selective crushing and proper blending is subjected to

destructive distillation (heating in the absence of air) in the Coke Ovens. After

heating for nearly a period of 16-18 hours at a temperature of about 1100o C, coke

is obtained and is used as a fuel as well as reducing agent in the Blast Furnace.

The Coke Ovens of VSP are engineering feats by themselves.  They are the tallest

ovens metre constructed in the country. The Plant has 3 batteries, which are 7

metres tall. Each battery consists of 67 ovens. Another feature is the dry cooling of

coke carried out by the inert gas nitrogen thus, reducing pollution considerably.

Besides a bio-chemical plant separately undertakes the treatment of effluents. By-

products like benzene, toluene, xylene, naphthalene, coal tar, creosote oil, pitch,

ammonium sulphate and benzol products are also recovered from the coke ovens

gas. VSP produces, among other by-products, “Pushkala” a prime fertilizer based

on ammonium sulphate.

3.2.3 SINTER PLANT

Iron ore fines, coke breeze, limestone and dolomite along with recycled

metallurgical wastes are converted into agglomerated mass at the Sinter Plant,

which forms 80% of iron bearing charge in the Blast Furnace. The Sinter Plant

comprises of two sinter machines each having 312 square metres of grate area

with a total production capacity of 5.256 million tonnes per annum.

3.2.4BLAST FURNACE

VSP has two Blast Furnaces with an effective volume of 3200 m3. each of

which are the largest in the country. Blast Furnace is charged with coke, iron ore

and sinter from the top and produces about 5000 tonnes of molten iron per day. Its

novel circular cast house with four tap holes ensures continuous tapping of hot

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metal. The annual production capacity of these Blast Furnaces is 3.4 million tonnes

of liquid iron.

3.2.5STEEL MELT SHOP & CONTINUOUS CASTING

Three Top-blown converters, each of 133m3 volume, produce a total of 2.7

million tonnes of liquid steel per annum. This liquid steel thus produced is cast in

six-4 strand bloom casters. A special feature in energy conservation is the

collection of Converter gas to be used as a fuel in the plant. The entire molten steel

at VSP is continuously cast at the radial type continuous casting machines resulting

in significant energy conservation and better quality steel. 100% Continuous casting

on such a large scale has been conceived for the first time in India.

3.2.6 ROLLING MILLS

The cast blooms from continuous casting department are treated and rolled

into various long products of different specifications at 3 high capacity continuous

rolling mills. They are:

(a) Light & Medium Merchant Mill: - The mill consists of a Billet Mill

capable of rolling 1,915,000 tonnes of 250 mm x 320 mm blooms into

1,857,000 tonnes of 125 mm x 125 mm billets and a bar mill designed to roll

7,26,000 tonnes of billets to 710,000 tonnes of finished light merchant

products like rounds, rebars, squares, equal and unequal angles, flats, T-

bars and channels.

(b) Wire rod mill: - This is equipped with Morgan blocks and Stelmor

technology having a capacity of 850,000 tonnes per annum utilizing the

billets from billet mill as feed stock.

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(c) Medium Merchant and Structural Mill: - This has capacity to roll

850,000 tonnes per annum of medium merchant products including universal

beams directly from continuous cast blooms.

3.2.7 THERMAL POWER PLANT

A captive power plant, which can generate a total of 287 MW of power

produces power from fuels like coal, waste gases and oil. This can meet the total

power requirement of the steel plant, and even export about 50 MW power to the

state power grid.

3.2.8WATER SUPPLY

Requirements of water during the peak construction were of the order of 4.5

mgd. This was met from the Meghadrigedda and Raiwada schemes of AP State

Government. Operational water requirements 36 mgd, is being met from the Yeluru

water supply scheme provided by the AP State Government. This involved

construction of storage reservoir at Yeleswaram and a 153 kms. long line canal to

the plant site apart from Kanithi Balancing reservoir.

3.3 VSP’s SPECIAL FEATURES

7-meter tall coke oven batteries with coke dry quenching.

Biggest Blast furnaces in the country.

Bell less top charging system in blast furnace.

100% slag granulation at the blast furnace cast house.

Suppressed combustion LD gas recovery system.

100% continuous casting of liquid steel.

“Tempcore” and “Stelmor” cooling process in LMMM and WRM

respectively.

Extensive waste recovery systems.

High speed rolling mills.

Compressive pollution productivity & highest level labour productivity.

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3.4 PRODUCTION CAPACITIES SHOP-WISE

DepartmentAnnual cap

‘000 TUnits (3.0 MT stage)

Coke ovens 2261 3 Batteries each of 67 ovens and 7 Meter height

Sinter Plant 5256 2 Sinter machines of 213 m2 grate area each

Blast furnace 3400 2 Furnaces of 3200 m3 volume each

Steel melt shop 3000 3 LD converters each of 150 m3 volume and strand bloom casters

LMMM 710 3 Stand finishing mill

WRM 850 2 x 10 stand finishing mill

MMSM 860 6 stand finishing mill

Table 3.2 Production capacities shop-wise

3.5 MAJOR PLANT FACILITIES

Visakhapatnam Steel Plant has the following production facilities.

Three Coke Oven Batteries of 67 ovens, each having 41.6 M3 volume.

Two Sinter Machines of 312 M2 area each.

Two Blast Furnace of 3200 M3 useful volumes each.

Steel Melt Shop with three L.D. Converters of 150 tonnes capacity each

and 6 numbers of four strand continuous bloom casters, which can

produce 3 MT of liquid steel per annum.

Light and Medium Merchant Mill (LMMM) of 710,000 tonnes per year

capacity.

Wire Rod Mill (WRM) of 850,000 tonnes per year capacity.

Medium Merchant and Structural Mill (MMSM) of 850,000 tonnes per

year capacity.

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Additional facilities have been provided for repair and maintenance as well

as manufacture of spare parts. A Captive Power Plant of 287.5 MW, Oxygen

Plant, Acetylene Plant, Compressed Air Plant, etc, also form a part of the facilities.

3.6 THE TECHNOLOGICAL PROCESS IN VSP

The raw material iron ore in itself does not hold any value for the mankind.

However once it gets converted into iron, through metallurgical reduction process, it

holds a vast potential for use as a versatile metal. It is this basic process that is

taking place in an integrated steel plant like VSP, which is explained in brief here.

Raw Material Handling Plant receives all the input process raw materials like

iron ore lumps and fines, coking and non-coking coal, limestone, dolomite, etc.,,

through railway wagons. The raw materials are prepared to the process

requirement of size & specifications using crushers, screeners and different types

of stacking and reclaiming machinery. Coking coal is converted into metallurgical

coke at 'Coke Ovens' (CO). Coke is used as the essential raw material in iron

making. During the conversion, saleable by-products like Ammonium Soleplate,

Benzyl, Tar, and Naphthalene are extracted from the flue gases generated in Coke

Ovens, at 'Coal Chemical Plant' (CCP).

At the Sinter Plant iron ore fines are agglomerated by partial heating into

lumps (called sinter) along with other essential additives & coke fines, for charging

into the Blast Furnace for the iron reduction process. Sinter, Coke and Limestone

charged from the top of the Blast furnace (BF) gradually descends to the bottom in

the hot outgoing gases. The liquid iron and slag (silicon impurities) get collected in

the bottom and get separated from one another, the slag being lighter.

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Both iron and slag are tapped and the slag is diverted and converted into

granules at slag granulation plant, as a value addition process to the slag, which is

used as input to brick and cement industries. Iron is collected in hot metal ladles

and sent to either pig casting machines or de-sulphurised to remove excess sulphur

and is sent to Steel Melt Shop (SMS). At SMS the iron is transformed into Steel

in LD Converters, by blowing high pressure oxygen gas through molten iron bath.

This iron refining process achieves the oxidation and removal of carbon, suplhur

and other impurities. Further purity is achieved by argon rinsing process. This

steel is cast into bloom in continuous bloom casting machines.

The Blooms from SMS are subjected to the process of re-heating and rolling

into saleable steel finished products, at Rolling Mills. There are three Mills at VSP,

to produce various finished products, namely: Light and Medium Merchant Mills

(LMMM): For producing billets, bars, angles and channels. Wire Rod Mill (WRM):

Wire rod of 6 to 12 mm thickness is produced. Medium Merchant and Structural

Mills (MMSM): Structural products like beams, large angles, I-sections, channels,

etc. are produced. At every stage, the above process is supported by other

essential inputs like electricity for driving the machinery, water for process and

cooling and the most essential input, the human resource or the manpower.

Converted in terms of a common unit of power, of all the process power inputs put

together, comes to around 6.62 Giga Calories for each ton of liquid steel produced.

With this one can well appreciate the technological process going on at a gigantic

scale, in an 'Integrated Steel Plant'.

Through all the above technological process, the growth in the value of the

basic iron ore grows a hundred folds, as it reaches its final stage, in the form

finished steel product. The process chart depicted at Figure : 3.1

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3.7 PRODUCT PROFILE

The range of products of Visakhapatnam Steel Plant and the capacity at 3.0

million tonnes liquid steel stage are:

1. Pig Iron: Low sulphur, low phosphorous grade, foundry basic grade.

2. Steel: Semis: Billet 125 x 125 mm

Structurals:

Equal Angles 35x35 to 110x110 mm

Unequal Angles 45x30 to 100 x 75 mm

Channels 40x32 to 180x90 mm

Beams (IPE) 100x55 to 180x90 mm

Beams (HE) 100x96 to 120x114 mm

Squares 12 to 65 mm

Flats 30 to 150 mm

T-Bars 50x50 to 100 x 100 mm

Bars & Rods Rounds (Plain) 12 to 75 mm

Rounds (Rebars) 10 to 25mm

Wire Rods (Plain) 5.5 to 12 mm

Wire Rods (Rebars) 8 to 12 mm

3. By Products

i. Fertilizer: PUSHKALA brand Ammonium Sulphate

ii. Coke fractions: Nut coke (15 to 25mm) & Coke dust.

iii. Coal Chemical & Tar Products: Coal tar pitch (soft) & Coal tar pitch

(hard), crude anthracene, anthracene oil, HP Naphthalene, creosote oil,

road tar, sodium phenolate solution.

iv. Benzol Products Caprolactum grade benzene, W.G. toluene, I.G. Xylene,

Solvent Naphtha LS & HS, Coal tar, wash oil.

Miscellaneous Products: Granulated BF slag, LD converter slag, fly ash.

3.8 TECHNO-ECONOMICS

BF coke yield of 63.5% in 2003-2004 one of the best in the world.

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BF productivity of 1.73 t/m3/day during 2003-2004 best in country

Converter lining life of 930 heats best in country

Specific refractory consumption of 12.8 Kg/tonne best in country

Specific energy consumption of 6.71 g.cal/T of liquid steel best in Indian

steel industry

LD gas recovery of 107 m3 in 2003-2004 is one of the best 3

performances in the world

Specific lubricant consumption of 0.58 Kg/tone of liquid steel during

2002-2003 is the seventh best in the world

Labour productivity of 262 tonne/man year is the best among Indian

integrated steel plants

Capital repair of category-II type of Blast furnace in 38 days is the best of

its kind in the world

Cost reduction measures resulted in overall savings to the tune of 175

crores.

3.9 CORPORATE PLAN OF RINL

3.9.1VISION

To establish as an excellent corporate citizen and ensure optimal return on

investment.

3.9.2 MISSION

To become a 10 million tonne world class integrated steel plant by 2019-20.

3.9.3 OBJECTIVES

Towards growth – Expand the plant capacity to 6 MT by 2009-10, 8

MT by 2014-15 and 10 MT by 2018-19.

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Towards Profitability – Achieve net profits continuously from 2002-

03.

Towards Stakeholders – Make RINL the company of choice.

Towards Technology – Continuously upgrade technology to operate

at international efficiency levels.

Towards Safety, Environment and Society – Continue efforts

towards safety of employees, conservation of environment and be

socially responsive.

3.9.4 CORE VALUES

Value foresight is crucial in today’s competitive businesses climate VSP

values

Commitment

Customer satisfaction

Continuous improvement

Concern for environment

Adoption of these values are reflected in

Improvement in performance

Employee discipline

Employee involvement

3.10POLLUTION CONTROL

Generally, integrated steel plant is seen as a major contributor to

environmental pollution as it discharges a large volume of waste products.

Elaborate measures have been adapted to combat air and water pollution in VSP.

In order to be eco friendly, VSP has planted more than 3 million trees over an area

of 35 square Kms. and incorporated various technologies at a cost of Rs. 460

crores towards pollution control measures.

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3.11WELFARE AMENITIES

The welfare measures provided for the employees of the Company are the

best in the industry. A modern township with all amenities has been developed with

8032 quarters to house the plant employees and other government agencies in 11

sectors. The township is having best facilities in terms of drinking water supply,

drainage system, roads, community centres, crèche, parks, schools, shopping

complexes, medical facilities, recreational facilities, etc to cater to the needs of the

employees and their dependent families. The Company also provides welfare

facilities much beyond the statutory requirements by way of introduction of a unique

superannuation benefit fund and a unique family benefit scheme.

3.12 PRODUCTION PERFORMANCE

It is the story of performance scaling new heights at Vizag Steel by

surpassing all records be it in production, marketing, profitability, human

endeavour. Registering a record turnover of Rs. 6,174 Crores as shown in Fig-3.2

with a growth of 22% over last year. The company is poised to make a provisional

gross margin of Rs. 2023 Crores, cash profit of Rs. 1972 crores and a net profit of

about 1,521 crores as shown in Fig-3.3, the best financial performance since

inception. Interest was contained to about Rs. 50 Crores. Vizag Steel’s habit of

putting continuous thrust on new processes and newer technologies enabled it to

consistently perform beyond rated capacities. Today the plant is operating at a

capacity utilisation ranging from 110% to 120% across various production units.

Vizag Steel’s continuous efforts towards energy conservation, cost reduction and

waste utilisation were mainly instrumental in placing Visakhapatnam Steel Plant

among the lowest cost steel producers in the world.

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It is needless to say that Human Resources is the prime factor for these high

performance levels attained and subsequent turnaround of Vizag Steel. Vizag

Steel’s continued thrust on total employee involvement across all levels has

contributed immensely for healthier IR scenario which in-turn led to zero man day

loss and today Vizag Steel has highest Labour Productivity of 262 tons/man year as

shown in Fig-3.4, the best amongst the Indian integrated steel plants.

During the year under review, VSP has sold 2.82 MT in domestic market and

0.38 MT in export market. To facilitate availability of material in domestic market,

VSP had reduced its exports by 9% over previous year. However, the price

increases and appreciation of rupee had resulted in export revenue earning by 28%

over previous year. The domestic sales turnover has also increased by 22% with

Rs. 5406 Crores. Creation of distinctive trend brand image and good customer

relationship management, will all efforts to give customer the value for money, are

always main concern at Visakhapatnam Steel Plant. As a result, customer

satisfaction is the main and foremost gain for Visakhapatnam Steel Plant today.

“VIZAG TMT” the brand name of Vizag Steel re-bars commands highest premium

in the market today.

During financial year 2003-04, the company has produced 4.05 MT of Hot

metal, 3.51 MT of liquid steel as shown in Fig-3.5, and 3.17 MT of Saleable steel as

shown in Fig-3.6, the best yearly performances since inception. After surpassing

the rated capacities consecutively for the last 3 years, Visakhapatnam Steel Plant

set its aim to utilise inherent untapped potential by making needful investments in

different areas to produce growth oriented products. Emphasis is also being given

on various AMR schemes with an objective to improve the quality of the products

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as well as to reduce costs. The company’s focus is on widening its product-mix

and stabilization of special steels production. During the current year, over 8.0

Lakh tons of special steels were produced as shown in Fig-3.7, which is about 1/4 th

of the total saleable steel. With this excellent performance for this financial year,

Visakhapatnam Steel Plant has made its make in international steel scenario. The

task for the future is to overcome the present constraints and chalk out the

necessary infrastructure development.

For the present, the immediate concerns for Visakhapatnam Steel Plant are

the non-availability of raw materials and the abnormal price rises of input materials.

With the increased production particularly in China and temporary closure of some

of the coal mines in Australia, there is a shortage of coal and coke all across the

global and Visakhapatnam Steel Plant is no exception. To tide over the present

crisis, VSP is putting all its efforts to source raw materials both from indigenous and

imported sources and is hopeful to get the required quantity for maintaining its

normal production levels. For the long term, VSP has set its aim to acquire Iron

Ore and Coal Mines and requested Ministry of Steel to take up with the concerned

Ministries and also exporting the possibility of joint venture to own some of the

coalmines abroad. With the immediate necessities being taken care of, the long-

term plans being pursued as per time schedule, Visakhapatnam Steel Plant is

determined to march-forward with improved performance year after year.

3.13 ISO CERTIFICATION IN VSP

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Standardisation of any process leads towards the desirable results of the

process. It tends to cut down on the wastage of energy and resources and

minimises process output defects and rejects. Adherence to standards also

increases the process and personnel safety aspects. It now follows as a logical

sequence that every organisation to achieve organisational objectives must have

technological and administrative norms laid down. VSP with its foresight has

envisaged the need to compete in the domestic and international markets and the

inherent need to be associated with 'International Standards Organisation' (ISO).

VSP has become the industry leader by becoming the first ever steel plant to have

obtained 'ISO-9001' for 'Quality Systems' for all of its processes, in April' 2000. It

has already geared its documentation and records to measure up to the

rationalised 'ISO-9000:2000' certification for 'Quality Management Systems'.

In October 2001 VSP has become one among the very few steel plants in

the world to be awarded the prestigious ISO 14001 Certificate by BVQI, London for

its Environmental Management System and in April 2002 VSP has been awarded

OHSAS 18001:1999 Certification for its Occupational Health and Safety

Management System by BVQI, London. With these certifications VSP has earned

the status of being the only integrated steel plant in the country accredited with 3

standards ISO:9001, ISO:14001, and OHSAS:18001. With these new technologies,

automation, along with commitment towards continuous growth and customer

satisfaction, and equipment comparable to the best in the world and introduced for

the first time in the country, Visakhapatnam Steel Plant is set to achieve market

leadership in the steel sector.

3.14MAJOR ACHIEVEMENTS & AWARDS

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Only integrated steel plant of receive ISO 9001-2000 certification for

quality management in India on January 2001.

Received ISO 14001 certificate for environment management on May

2001.

Only integrated steel plant in India to receive OHSAS 18001 certification

for Occupational health and safety management system on January

2002. Indira priyadarshini vriksha mitra award: 1992-93.

Nehru memorial national award for pollution control: 1992-93 & 1993-94.

EEPC export excellence award : 1994-95.

CLL (south region) energy conservation award: 1994-95.

Golden peacock 1 prize “National Quality Award-1996”.

Steel minister’s trophy for “Best safety performance” in 1996,1997 and

1998.

Goldstar award for excellent productivity.

Udyog excellence gold medal award for excellence in steel industry.

ISPAT suraksha puraskar (1st prize) for longest accident free period:

1991-1994.

SAIL chairman’s silver plaque for “NO FATAL ACCIDENT” for the year

1999.

Best Energy Conservation trophy for the year 2003.

Bagged Prestigious PM’s Trophy for the best integrated steel plant for

2002-03.

3.15 ORGANISATION STRUCTURE OF VSP

The organisation structure of VSP is of functional type i.e. as per

specification. The functional directors of Operations, Finance etc. reported to

Chairman-cum-Managing Director. The detailed organisation structure of VSP is

shown in Fig : 3.8.

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