"We may show marginal profits this year. However, with no signs of revival of the industry, the plant's performance will be below par," Singh told newsmens on Sunday.

SAIL had recently completed the first phase of modernisation of Bokaro steel plant, involving about Rs 2,000 crore for revamping the hot-strip mill and installation of continuous-casting department, replacing the ingot route of producing steel.

This will enable SAIL compete with private producers of hot-rolled (HR) coils produced by using latest technology, Singh said.

SAIL will be able to output a range of HR coils. The thickness range will widen from 2-10 mm to 1.8-12.7 mm and in narrow widths, thickness can go down to 1.6 mm and in case of specific grades up to 16 mm. SAIL will have to face stiffcompetition, once the Ispat group starts production of HR coil. The group has adopted a technology which can produce HR coil of thickness up to 1.3 mm.

Modernisation of the plant had become inevitable as competitors had latest equipment and better technology, and to produce steel of comparable quality became a major challenge for SAIL, Singh said. Two major areas were identified where maximum technology gap existed -- replacing ingot route and revamping the hot-strip mill. The improved quality and wider range of product would open new vistas of market segments which were very profitable and booming like the auto and white-goods sectors.

The first phase of modernisation will raise liquid-steel production from 4.08 million tonne to 4.50 million tonne and saleable steel from 3.16 million tonne to 3.78 million tonne.

The yield from liquid steel to saleable steel will also go up from 78.2 per cent earlier to 84 per cent.

Modernisation will help the plant to reduce energy consumption in a big way from 0.905gega calories per tonne to 0.576 gega calories of hot-rolled products.