India’s largest steelmaker Steel Authority of India Ltd. (SAIL) is likely to complete the Rs 160 billion ($2.96 billion) modernization and expansion of the IISCO Steel Plant (ISP) at Burnpur in the state of West Bengal by the end of this fiscal year, reports Business Line.
Nearly Rs 130 billion ($2.4 billion) has been spent on modernization and SAIL’s opening the project in phases, C.S. Verma, SAIL’s chairman and managing director, was quoted as saying.
The project is part of the Rs 720 billion ($13.3 billion) expansion plan.
The steel behemoth earlier announced its ambitious expansion and modernization plans for its units with an investment of Rs 720 billion ($13.3 billion) to raise production from 14 million tons per year to 24 million tons in two years.
Entire modernization and expansion work would be completed in a phased manner in all steel plants of SAIL which seeks to raise its capacity to 40 million tons to 60 million tons per annum after eight years, as per its 2020 vision document, Verma has said.
Rs 105 billion ($1.94 billion) would be spent on the Raw Material Division, and Rs 560 billion ($10.3 billion) will be spent purchasing machinery for expansion and modernization of units.
Apart from increasing production capacity, the modernization project would also address vital issues such as eliminating technological obsolescence, and installing energy-efficient and environment-friendly technologies.
SAIL is a fully integrated iron and steel maker, producing both basic and special steels for domestic construction, engineering, power, railway, automotive and defense industries and for sale in export markets.
According to the Business Line report, IISCO currently produces 0.2 million tons of hot metal annually, against a nameplate capacity of 0.78 million tons. After expansion, the hot metal production will increase to 2.5 million tons a year. The total hot metal capacity of the company is slated to move up from 14 million tons to 19 million tons during the fiscal year.
The company says ISP produces a large number of steel structurals and special sections as well as pig iron. The plant pioneered the production of center–sill Z-sections used in the fabrication of wagon and Z-type sheet piling sections used in construction of bridge foundations and other projects, and colliery arch sections used for roof support in collieries. The plant has also developed ‘slit rolling’ for small diameter rounds (10 mm and 12 TMT), which are in high demand in the domestic market.
ISP was the second integrated steel plant, after Tata Iron and Steel Co. Ltd. (TISCO) at Jamshedpur, to come up in India and for many years, these two were the only steel plants in the country.
Meanwhile, SAIL has reported a 3 percent rise in standalone profits for the March quarter, aided by higher sales volumes and pricing.
SAIL major beat private sector rivals Tata Steel and JSW Steel in profit growth for the March quarter that saw a rebound in consumption from sectors such as infrastructure and construction. However, the company’s profits for 2011-2012 were down 28 percent at Rs 35.4 billion ($656 million) against Rs 49.05 billion ($908.3 million) the previous year.
TC Malhotra contributes to MetalMiner from New Delhi.