Our "Make in India" initiatives to convert imported iron ore
or concentrate into exportable pellets align with national priorities strengthen our
global market position.
Dear Valued Shareholders,
The overall outlook of our operating environment continues to be
volatile with outliers taking a front seat but positive tendencies can be seen on the
horizon. This past year has been marked by significant challenges due to the unprecedented
market volatility. The global economic environment has been highly unpredictable, with
factors like Ukraine-Russia conflict, causing disruptions in supply-chain and weakening
global demand that has impacted our performance. The global steel industry faced
significant headwinds at the beginning of FY 24. However, as a nation, I am proud to
report that we demonstrated resilience and agility. Domestic steel demand bounced back
with an impressive 13.6% growth. While energy prices are expected to stabilise, we
continue to monitor the impact of geopolitical tensions.
Embracing Growth Opportunities
In the face of external challenges, KIOCL has achieved significant
progress toward long-term growth. As a strategy to restart our Blast Furnace Operations
with the ongoing construction of coke oven plant, we are exploring Joint Venture
partnership for manufacturing value added steel product. Additionally, our "Make in
India" initiatives to convert imported iron ore or concentrate into exportable
pellets align with national priorities strengthen our global market position.
A key milestone for KIOCL this year was the Government of India's
approval of a capital outlay of H 882.46 crores for Phase I of the Devadari Iron Ore
Mining Project (DIOM) in June 2024. This project is the cornerstone of our longterm
strategy, expected to significantly enhance our raw material access and production
capacity.
Financial Performance
FY 24 was a year of strategic investment for KIOCL. Our revenue from
operations reached H1,854 crores, and we made substantial capital expenditure (capex)
investments to propel future growth.
While this resulted in a modest loss on the Company's balance sheet, we
are confident these investments will yield long term benefits. Turnover increased to
H1,904 crores compared to H1,623 Crores during FY 23 and we are also concentrating to
increase our revenue from the sale of services (O&M Operations and Mineral Exploration
Services). This would ensure a well- diversified revenue stream beyond pellet production.
Despite our rigorous efforts and strategic initiatives, external
factors have inevitably affected our financial outcomes. While our results this year may
not reflect the growth trajectory we have historically aimed for, it is important to
recognize that these challenges were largely beyond our control.
Despite the short-term impact on the balance sheet, we are confident
that these strategic investments will translate into improved capacity utilisation,
production volumes, and profitability in the coming quarters. Our commitment to financial
prudence is reflected in our debt-free status. We remain confident in
the underlying strength of our business and the long-term potential of our industry. As
market conditions stabilize, we expect to recover and return to our growth path
Unlocking New Horizons
We are particularly excited about the recent progress on the Devadari
Iron Ore Mine (DIOM) Project. Following the approval for Phase I, we successfully executed
the Mining Lease Deed with the Director of Mines and Geology, Government of Karnataka,
securing 388 hectares for the project. Additionally, the Government of Karnataka has
issued an order for the diversion of 401.5761 hectares of forest land, further advancing
the project.
So far, KIOCL has invested approximately H530 crores in the DIOM
project, including H329.18 crores towards stamp duty, cess, and registration charges for
the mining lease. These strategic investments are crucial as we prepare to commence
production by 2024-25.
In order to have flexibility in blending of Iron ore Fines from
different sources & reduction of moisture in the concentrate to the extent of 9-10% to
produce good quality pellets, the company has successfully commissioned Vertical pressure
Filter System in the Pellet Plant Unit during the Financial Year 2024 at a total financial
outlay of H158.60 crores.
Pioneering Digital Transformation
At KIOCL, we recognise the transformative power of technology. We are
embracing digitalisation across all levels of our operations to streamline processes,
improve efficiency, and make data-driven decisions. Our implementation of SAP S/4 HANA has
automated manual tasks and integrated critical functions, enabling faster decisionmaking.
Additionally, the File Lifecycle Management (FLM) module promotes a paperless work
environment, furthering our commitment to sustainability.
Optimising our Pellet Plant Operations remains a key focus area.
Currently operating at 70% capacity, we are implementing strategies to improve this
metric. Our dedication to quality, productivity, technology, and environmental stewardship
continue to be a hallmark of our operations. As part of this focus, we recently installed
a vertical pressure filter to handle low- grade iron ore fines, enhancing capacity
utilisation. We are also actively exploring and integrating Industry 4.0 technologies.
These advancements hold immense potential to optimise productivity, enhance flexibility,
and unlock new levels of profitability.
Upholding Social Responsibility
KIOCL has a long and proud tradition of social responsibility,
predating the mandatory CSR Rules of 2014. We believe in giving back to the communities we
operate in. This year, we actively participated in initiatives such as Swachh Vidyalaya
Abhiyan, promoting cleanliness and sanitation. We also organised tree plantation drives
and addressed pressing issues like hunger, poverty, and malnutrition. Above all, we are
dedicated to empowering the next generation through skill development programs.
My gratitude for your support
I would like to express my heartfelt gratitude to our dedicated
employees, whose unparalleled dedication and expertise are the backbone of our success. To
our valued shareholders, your continued support & trust are invaluable to us as we
work to overcome the challenges being faced by the company.
Looking ahead, we at KIOCL are optimistic about the future. With a
renewed focus on operational excellence, strategic expansion, and technological
innovation, we are confident in our ability to deliver sustained value to our shareholders
and stakeholders.
Thank you for your continued trust and support.
Sincerely,
SD/-
Ganti Venkat Kiran
Chairman-cum-Managing Director