Increase productivity to save SCCL, MD Balram tells employees

CCL CMD N Balram warned that the 136-year-old company faces an existential crisis due to rising competition, cheaper coal from rivals and imports, and renewable energy growth. He urged employees to boost productivity and cut costs to retain customers

Kothagudem: The Singareni Collieries Company Limited (SCCL), with a history of 136 years, is facing an existential crisis, according to its Chairman and Managing Director N Balram. Addressing employees during the 79th Independence Day celebrations here on Friday, Balram said the company must increase productivity to overcome growing challenges.

Referring to increased competition in the market, he said the company has no option but to reduce coal prices by at least Rs. 1,000 per tonne to retain customers. This, he stressed, would only be possible by cutting production costs through optimum utilisation of machinery and the full eight-hour duty time of employees.

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“If production increases, productivity will improve, and there will be no loss even if the selling price of coal is reduced. We have no future unless we accept these challenges and reduce the price of coal,” Balram said.

SCCL was once the only coal producer in South India, but now several government and private companies are in the market. While Coal India has increased coal prices by only 20 per cent in the past decade, SCCL prices have risen by 170 per cent due to special conditions, wage revisions, and higher operational costs. The cost is further driven up as opencast mines extract an average of eight cubic metres of overburden per tonne of coal, and underground mining expenses are higher.

Balram pointed out that the demand for SCCL coal is gradually declining with the growing availability of renewable energy sources like solar and wind power. Coal India subsidiaries sell coal at about Rs. 2,000 less per tonne than SCCL, and imported coal is cheaper as well. As a result, long-time customers are turning to suppliers like Mahanadi Coalfields in Odisha.

In the past, non-power sector customers bought 110 lakh tonnes of coal annually from SCCL. Now, purchases have dropped to less than 50 lakh tonnes due to high prices. Thermal power plants, which account for 90 per cent of SCCL’s coal sales, are asking governments to allow them to source cheaper coal from other suppliers.

“If such requests are approved, the survival of Singareni will be in question,” Balram warned, urging employees to work harder and focus on customer retention to ensure the company’s future.