Date:08/12/2004 URL: http://www.thehindubusinessline.com/2004/12/08/stories/2004120802720200.htm

Back BSP to invest Rs 5,000 cr for expansion, modernisation

Our Bureau

Kolkata , Dec. 7

AS a part of the total corporate investment planof Steel Authority of India Ltd (SAIL), Bhilai Steel Plant (BSP) will be investing Rs 5,000 crore during 2005-06.

According to Mr R.P. Singh, Managing Director of BSP, with this investment, the company will set up its third steel melting shop, go for total continuous casting, build a compact strip mill and also a bar and rod mill.

SAIL's corporate investment plan states that BSP would be investing approximately Rs 9,000 crore to increase hot metal producing capacity from the present level of five million tonnes per annum to seven million tonnes per annum by 2012.

Once the total investment is made, BSP would be producing steel only through the continuous casting route.

The share of semi-finished products would also come down to 6 per cent from the existing level of 26-27 per cent.

Talking about the Rs 5,000-crore investment plan, Mr Singh said, MECON has been appointed as a consultant and the report would be ready within the two to three months.

"Thereafter the proposal would be forwarded to IFCI for appraisal. Then it would be placed at the SAIL's board. We are expecting the plan to be cleared within the next four or five months," Mr Singh told newspersons.

Like SAIL's overall investment strategy, here too funds would be generated from internal accruals.

With the completion of the expansion-cum-modernisation programme, BSP's product mix would change from 74 per cent long and 26 per cent flat to 53 per cent long and 47 per cent flat.

"We are planning to a HR coil mill of 1.2-million tonne per annum capacity. We are hoping to product flat products of a minimum of 0.8 mm thickness. We would be targeting the automobile and white goods manufacturers," he said.

The company is also planning to produce 260-metre-long rail. Recently it started producing 78-metre-long rail. The plant would also be producing large diameter pipes.

However, Mr Singh expressed great concern over the depleting stock of the Dallirajhara iron ore mines.

BSP has already been awarded the Rowghat iron ore mine but it has faced severe obstacles from the Union Ministry of Forests.

"At present, we are noticing several positive developments. The Chief Ministers and the Union Ministers had held several discussions. We hope to get all the clearances soon," he said.

The Dallirajhara mine has only seven-year stock. As an alternative, BSP is eyeing the Chiria mines, which now belongs to Indian Iron & Steel Co. The Rowghat mine has a known deposit of over 500 million tonnes.

"The other alternative is buying from the Bailadila mines of National Mineral Development Corporation. This would affect our profitability to the tune of Rs 1,000 crore", Mr Singh said.