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COVID 19 impact: SAIL rationalises ops, says capacity utilisation will go down

In a regulatory filing, state-run SAIL has told the stock exchanges that it is rationalising its operations in the wake of COVID 19 pandemic
New Delhi: In a regulatory filing on Friday, state-run SAIL (Steel Authority of India Limited) has told the stock exchanges that it is rationalising its operations in the wake of COVID 19 pandemic. As a result of which, its capacity utilisation is likely to go down during the period of lockdown. “Following the 21-day nationwide lockdown declared by our Hon’ble Prime Minister on 24/03/2020 in his address to the nation (w.e.f. March 25, 2020) and the various advisories/directives issued by Central and State Governments and local Municipal Corporations, and considering the emerging consequences of complete lockdown (with exception to certain specified essential activities) on availability of input raw materials, health and safety of the employees and their families, limited logistic support and sales constraints, the manufacturing operations in all our Plants/Units locations have since been rationalised as warranted by the difficult circumstances. Consequently, the capacity utilisation is likely to go down during this period of lockdown,” SAIL said in the regulatory filing.

SAIL: Overall impact of COVID 19 not immediately ascertainable at this stage

SAIL also went on to say that the overall adverse impact of the lockdown imposed in the wake of COVID 19 pandemic on the operations of the company and the expected financial impact is not immediately ascertainable at this stage. “The Company is closely monitoring the situation and taking appropriate action as per the directions issued by regulatory authorities from time to time, keeping in view the interest of the Company, health and safety of all its employees and their families and the interest of the nation at large. It shall resume full operations as soon as the situation permits,” SAIL said.

The backdrop

The news comes as industries in India have come to a standstill as a 21-day lockdown has been put in place to curb the spread of Coronavirus. The government has declared that it will come out with an economic relief package in a phased manner to ease the stress faced by the economy. The first slew of announcements, targeting the urban and rural poor and migrant workers, was unveiled by Union Finance Minister Nirmala Sitharaman on March 26.