Electrosteel to set up steel plant near Kolkata

Electrosteel Castings Ltd, the country's largest ductile iron (DI) pipe maker, is planning to set up a steel plant at an approximate cost of Rs 600 crore.

The unit is expected to come up near Kolkata, which is the head office of the company and home of the promoters, the Kejriwal family.

The new unit will have a capacity of 2 lakh tonne of flat products and long products. When contacted, a top Electrosteel Castings official confirmed work on the project.

He indicated the company would wrap all the details and be in a position to announce the decision in April 2004.

Electrosteel might privately place equity shares with foreign institutions to part finance the proposed venture.

The steel plant was in line with its plan to set up a sponge iron factory and extension of its current business of manufacturing and marketing of DI pipes.

Electrosteel Castings would also set up a 30,000 tonne capacity sponge iron factory at Haldia. The plant, for which a 15 acre plot was being acquired, will be operational by March 2005.

In addition to the 30,000 tonne sponge iron unit, the on-going capital expenditure of Rs 170 crore would include setting up a 1.50 lakh tonne per annum coke oven battery and a 10 mw captive power plant at Haldia.

Another coke oven unit of 1.20 lakh tonne along with 8 MW power unit would be set up by Lanco Kalahasthi Ltd, which Electrosteel took over nearly two years ago.

"The import price of coke has gone through the roof over the past couple of years. The rise in price, almost by 5 times, has eroded margins. The coke oven units is aimed at arresting the impact of rise in international prices of coke," a top Electrosteel official explained.

Fund flush Electrosteel has raised the entire funding requirement of the Haldia coke oven battery through issue of 6.1 per cent debentures in August. It also raised Rs 32 crore for the Kalahasthi project from banks.

The balance will be funded from internal accruals. The coke oven battery would begin commercial operation from July while the power plants would be commissioned in December 2004.