Ispat to double steel capacity to 5m tonne

Second electric arc furnace under installation

The Pramod Mittal-controlled Ispat Industries is chalking out a plan to increase its steel production capacity from 2.4 million tonne per annum to around 5 million tonne per annum in three years.

Ispat is, at present, increasing its finished steel making capacity to 3 million tonne and expects to complete the Rs 890 crore exercise by March-end.

The 3 million tonne finished steel capacity will be further enhanced to 3.6 million tonne without a significant capital expenditure. The company is also installing a second twin-shell electric arc furnace with a capacity of 2.4 million tonne.

A top Ispat official said, "With the second twin-shell electric arc furnace coming up, there is potential to go up to 5 million tonne per annum of steel making capacity. However, there are no matching metallics or iron making capacity and no matching finishing mills. We are yet to take a decision on this matter."

The company has the option to make 3.6 million tonne of finished steel and 1.2 -1.4 million tonne of slabs from the 4.8 million tonne of steel making capacity if matching metallics is available.

A steel analyst said, "The company has the options of expanding the metallics' capacity through direct-reduced iron route or through a blast furnace."

Meanwhile, Ispat is also looking at reducing its debt portfolio. The company recently reached at an agreement with its bond holders to retire its $122.16 million euro convertible bonds at a 75 per cent discount.