Massive head count is the main problem for this steel maker.
New age steel plants have left public sector steel maker SAIL far behind in terms of employee efficiency.
In 2014-15, SAIL spent seven times more on employees for producing each tonne of steel as compared to JSW Steel.
The Sajjan Jindal-owned company also out performed Tata Steel in this regard.
According to the annual results of the companies, Tata Steel’s standalone business (India) spent ₹50.73 crore on employees for producing each tonne of steel against ₹12.39 crore spent by JSW Steel.
SAIL lagged far behind at ₹70.07 crore, despite several modernisation and expansion projects undertaken to improve efficiency. But, the lower spend on employees is by no means an indication of lower production.
JSW Steel’s production at 12.63 million tonnes was only marginally lower than SAIL’s 13.91 million tonnes in 2014-15.
Tata Steel’s production from India stood at 9.07 million tonnes. SAIL’s problem stems from its massive employee count. While the 2014-15 numbers are not yet out, it ended March 31, 2014, with 97,897 employees.
In comparison, JSW had 11,099 people on its rolls. On the same date, Tata Steel had 36,199 employees working in India.
In fact, on an average SAIL spends less on each employee than any other steelmaker in the country. In the 2013-14 fiscal, its average spend per employee was ₹9.80 lakh compared to Tata Steel India’s ₹10.14 lakh and JSW Steel’s ₹11.69 lakh.