The public sector Steel Authority of India Ltd is likely to set a target of Rs 700 crore (Rs billion) (Rs 7 billion) as a cost saving budget for this financial year after a preliminary review of its plants.

A SAIL executive said that the finer points of the cost saving plan is yet to be firmed up. The final plan will be ready by June.

The executive said that the company's four integrated plants will send their preliminary report on savings by the first week of June.

"Based on the reports that we get from the plants, a final plan will be chalked out by next month. We, however, feel that we can achieve this figure," the executive said.

The SAIL executive also said the company's margins will improve significantly in case it manages to touch the Rs 700 crore savings figure.

The company will focus on better and efficient management of solid wastes and raw material to save costs. The company is hoping to save Rs 80-85 crore (Rs 800-850 million) from the management of solid waste.

That apart, the company is trying to improve the life of the steel ladles and use cheaper inputs for production without impacting the quality of the products.

It is learnt that the research and development department is already working on this. Energy consumption is another area which the company is trying to work on to save costs.

To bring about more savings, the company is trying to further bring down the average cost of interest in the coming months from the current level of 10 per cent. The total borrowing level for SAIL stands at Rs 13,000 crore (Rs 130 billion).

In 2002-03, the company's total savings was estimated at Rs 451 crore (Rs 4.51 billion) as against a target to Rs 520 crore (Rs 5.20 billion).

SAIL's total savings in last five years accounted for over Rs 4,000 crore (Rs 40 billion). With all these cost saving measures, the company is hoping to turnaround by the fiscal end.