Unethical practices tarnished VSP’s brand image: CITU

CITU State general secretary Ch. Narasinga Rao on Monday (December 1) alleged that the management of Visakhapatnam Steel Plant (VSP) is resorting to unethical practices to tarnish the brand image of Vizag Steel by using inferior quality of coke (a solid fuel made by heating coal) in the ‘coke oven’ department of VSP.

Addressing a media conference here, the CITU leader alleged that use of inferior coke was resulting in poor quality steel being made, and buyers were rejecting it. He said the coke being imported directly from abroad was of inferior quality and was being sold for commissions. He recalled that the CITU had lodged a complaint with the CBI on the use of inferior coke in the past.

He said that production at the Steel Melting Shop (SMS) of the VSP was stopped for two days due to lack of limestone from its own mines. While the steel plant was supposed to stock enough raw materials for 45 days, the current stock can barely last three days.

On the revenue side, VSP made a profit of ₹74 crore in April 2025 and ₹52 crore in May. Profits were made from January to June 2025, by which time the plant’s two blast furnaces had achieved 100% production (15,000 tonnes per day).

In June, however, a third blast furnace began production. This caused losses of ₹121 crore in July and ₹157 crore in August. Wondering who was responsible for it, he said the CBI should investigate the matter.

Since June, production in the blast furnace has fallen to 67% due to use of inferior coke. Known for its quality, Vizag Steel was exported for the past 4 years and had won many awards. This reputation was at stake now.

While raw materials accounted for 63% of the total production cost in 2024, it rose steeply and stood at 75% in 2025. No steel plant elsewhere in the world has its raw material cost so high. The raw materials account for about 50% of the total production cost at SAIL, he said.