Jindals start work on Orissa stainless steel plant

A major portion of the first phase of the proposed Rs 7,000 crore stainless steel plant to be set up by the Jindals at Duburi in Jajpur district of Orissa will be ready for operation by March, 2005.

Coming up under the banner of Jindal Stainless Steel Ltd (JSL), the venture envisages 1.6 million tonnes of stainless steel production along with three lakh tonnes of ferro chrome, 1.6 lakh tonnes of ferro manganese and ferro silicon and 500 MW of captive power generation.

The project is being set up in three phases, said Ratan Jindal, vice chairman and managing director of JSL who was here to participate in the Bhoomi Puja of the project at Kalinga Nagar Industrial Complex, Duburi, about 100 kms from Bhubaneswar.

The first phase comprises of 1.5 lakh tonnes of ferro chrome, 80,000 tonnes of ferro alloys and eight lakh tonnes of stainless steel production. "The second phase is a duplication of the first phase and in the third phase we will put up the hot rolling and cold rolling mills", said Jindal.

He said, the first module of ferro chrome (1.5 lakh tones) and ferro alloys (80,000 tonnes) production will be ready for operation between February and July next year. This will be followed by setting up of coke oven battery and blast furnace for steel production, which will take another year and half to two years.

Jindal said, the first phase will cost about Rs 960 crore for which funds are being tied up. The project will have a debt equity ratio of 2: 1.

A major part of the funds will be raised through ECBs and FCCBs, he said, adding, for the balance fund requirement, talks are on with a consortium of banks led State bank of India (SBI). The equity portion will be met from internal cash flows.

The company intended to start the civil construction of the project immediately and has already placed orders for the ferro chrome furnaces with SMS Demag of Germany. "We are running six months behind schedule because of delay in hand over of the land by Industrial Infrastructure Development Corporation (IDCO). So we have to now push ahead with the work to complete the project in time", Jindal observed.

The total project requires about 1700 acre of land. Of this, the company has already acquired 640 acres while another 600 acres is reserved in its name.

Jindal said, the company has applied to the Orissa government for allotment of captive mines for the project. But pending the allotment, it will go ahead with the venture on the assurance of committed raw material supply by Orissa Mining Corporation (OMC).

When completed, the project will employ 2,000 people directly and another 10,000 people indirectly, he added. Meanwhile, the company hoped to enter into a formal MoU with the state government soon to facilitate establishment of the plant.