Steel Authority of India (SAIL) plans to set up a 1.2 million tonnes per annum (mtpa) cold rolling mill at its Rourkela Steel Plant (RSP), which may entail an investment of around Rs. 5,000 crore, through a joint venture.
The state-run company, which is ramping up its steel making capacity to 24 mtpa from 14 mtpa now, has already floated a global tender, inviting bids from potential partners. The proposal is to install a 1.2 mtpa cold rolling mill complex at RSP though the venture to cater to the auto sector, a source said. The “strategic” partner should have experience and expertise in the field, he added.
“SAIL believes that there is a huge potential for such sheets in India and the demand is only going to go northward in the coming days. However, it does not have the necessary technology and the plan is thus to rope in a partner which has the necessary technology for producing such sheets,” the sources said. The source said that the SAIL and its proposed joint venture partner might have to invest around Rs. 5,000 crore for the cold rolling mill.
“It would be divided among the two in the ratio of their stake holding in the proposed venture,” he said.
The domestic auto sector, which has been running through a prolonged bad patch, has started looking up in the last two months. Industry experts opined that Indian automotive market has the potential to grow multi-fold in the coming years.
“SAIL knows it and that is why in order to produce high quality rolled sheets for the auto sector, it is proposed to install a new 1.2 mtpa cold rolling mill complex at Rourkela Steel Plant in strategic partnership with an established global player,” he said.
The company’s Board Sub-Committee on strategic alliance and joint venture has also approved the proposal, he said.
