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SAIL plans second pipe plant

By Our Staff Correspondent

KOLKATA. MARCH 12. Even before the Rs. 89 crore modernisation of the ERW pipes plant at the Rourkela Steel Plant is complete, the Steel Authority of India Ltd. is exploring the possibilities for a second one to optimise the growing opportunities in the oil and gas pipeline market. The contender this time is the Bhilai Steel Plant.

According to sources, the Bhilai Steel Plant, now manufacturing API grade plates, has recently appointed MECON to conduct a feasibility study for forward integration into 8mm to 25 mm thickness pipe manufacturing. According to a rough estimate the project would cost Rs. 200 crores. While a formal proposal will be placed before the board of directors in the next two to three months, SAIL's central marketing organisation is asked to conduct a detailed study of the opportunities in the wider pipe market.

The basic thrust is on the high growth areas of large diameter water pipes, witnessing high demand in the southern States, and oil and gas pipes. The former is a traditional forte of RSP, which is now in the process of adding capacities for API X-70 grades used in gas and oil pipelines.

The RSP was also a major supplier of pipes used in ash handling in power plants. Scheduled to be completed by October, the modernised ERW pipe plant is also expected to limit RSP's losses.

For, BSP, however, the pipe project, if comes through would be a means to enhance the profitability of its plate mill. Striving to change its product mix more towards special steel, the plant now in the process of tying up a major defence supply contract for DMR 249A grade import substitute plates used in warships. Sources said that the plant had already impressed the defence sector by scoring better quality parameter that they had expected.

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