Karimnagar, February 3
Singareni Collieries Company Limited (SCCL), which has been earning profits for the past few years, is again retreating to losses. Availability of foreign coal for a cheaper price in open market, low quality of coal and high production cost is the cause as to why SCCL is incurring losses.
SCCL fixed 66.06 million tonne coal production target for 2016-17 year and produced 42.42 million tones by December last year. Against the target of 46.92 million tones coal production till date, the SCCL has produced only 4.50 million tones.
Both local and foreign coal mines are giving a stiff competition to SCCL in open market. SCCL coal is losing its prominence as other companies are supplying quality coal and also for a lesser price.
The Singareni Collieries company is incurring losses due to low coal production and also because of a dip in sales. Also the high expenditure for coal production, company development and customers failing to make payments on time and several other reasons are making the SCCL to incur losses.
The company earned about Rs 1,006 crores profits during 2015-16 financial year. The officials are estimating the profits may decrease to Rs 300 crores during 2016-17 fiscal year.
Though the company is running in losses with about Rs 307 crores by October last year, the company may get profits due the raise in coal production from December and increasing demand for coal in the market.
SCCL has to lower the coal prices in October due to adverse market situation. Last year, the cost of production of each tonne was Rs 1,847 and the company sold each tonne at Rs 2,111, thus getting a profit of 264 per tonne.
But now instead of profit, the company is getting a loss of Rs 140 per tonne. It seems that the company profits may further decrease this year. But the officials are preparing plans to complete the targets within the dead line.