BUSINESS

Bhilai Steel to submit Rs. 5,000 crore plan to IFCI

KOLKATA, DEC. 6. The Bhilai Steel Plant (BSP), Steel Authority of India's most profitable plant, is planning to approach the IFCI for appraising a Rs. 5,000 crore investment plan, BSP managing director, R. P. Singh, said.

Addressing a press meet here, he said that the SAIL board would be approached for approval of this plan, within five months. "We will do this after we get the IFCI appraisal report," he said.

A chunk of this investment would go towards upgrading BSP's production technology towards full continuous casting against the mere 15 per cent of steel that BSP makes through this method, considered more efficient. This is expected to happen by 2008-09.

The Bhilai plant, which is eyeing a Rs. 2,500 crore profit this fiscal, is also planning to change its product-mix in favour of flat products. The plant is now a predominantly longs product plant making plates and rails mainly.

Targeted segments

With increased production of flat products such as hot rolled coils, the plant would be able to leverage its bottomline better, it was felt. The share of flats would increase from 26 per cent to 41 per cent. "The market for flats was better with price buoyancy," Mr. Singh said, adding that the plant had targeted three growing segments — construction, petroleum and natural gas and the coil drawing industry.

Impending issues

Addressing some of the impending issues of concern, the MD said that supply of iron ore was a problem since the stocks of its present source, the Dalli-Rajhara mines, were depleting fast.

Efforts were now on to get iron ore blocks at the Rowghat iron ore mine under the Chhattisgarh Government. This project would need an investment of Rs. 1,350 crores, including the laying of a railway line and for setting up a 14 million tonne crushing and screening plant at site. This had already been dovetailed into the Rs. 9,000 crore corporate plan for the Bhilai Steel Plant.

Slated to increase its production of hot metal to seven million tonnes by 2012 from five million tonnes, the plant will also reduce the production of semis and boost its net sales realisation.

He said that the plant which ended the first-half of 2004-05 with a Rs. 1,284 crore profit, has been able to tide over the difficulties resulting from the coal shortage (and the resultant drop in production) by increasing production of value-added materials and by reducing production costs.

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