RINL draws up Rs 25,000 cr SEZ plan

Mini-ratna Rashtriya Ispat Nigam Ltd (RINL) is all set to embark on an ambitious expansion plan to raise its capacity from 3.6 million tonnes per annum to 16 million tonnes by 2018 along with setting up a special economic zone with an investment of over Rs 25,000 crore.

State-owned Steel Authority of India Ltd (SAIL) had earlier announced its intention to raise its steelmaking capacity to 40 million tonnes by 2020 from 13.5 million tonnes presently. These projects would raise the combined steelmaking capacity of staterun units to 56 million tonnes in 14 years.

RINL, also known as Vizag Steel, is the country's only plant that is located on the coastline in proximity to a port and the company is keen to develop a special economic zone in the Vizag-Kakinada corridor, near the existing plant that would help it access overseas markets.

The company had earlier made plans to expand to a capacity of 6.8 million tonnes before 2008 but its board approved the roadmap for the latest expansion plan given the rapid growth for demand in steel in both the domestic and international markets.

"A detailed plan is being prepared now after exploring various alternative frontline technologies that would be appropriate in the context of the need to ensure raw material security, improve techno-economics and other aspects," RINL officials said.

The investment of Rs 25,000 crore would be funded by a combination of internal accruals and debt. The steelmaker, who until now manufactured long products used in construction and infrastructure activities, will also make a foray into flat products.

The proposed SEZ would be available to downstream manufacturers - mainly auto ancillary units - who could purchase finished steel from Vizag Steel and convert this to auto components and forgings.

The 250-acre special economic zone that is yet to be approved by the government, would also be available to wire rod drawing units and high carbon drawing units.

The second phase of expansions would take up the capacity from 6.8 million tonnes to 8.5 million tonnes by 2011, followed by the third phase that would hike capacity to 13 million tonnes by 2015. The final phase would be completed by 2018 and take up the final capacity to 16 million tonnes.

On completion, the plant would manufacture 8.5 million tonnes of long products and 7.5 million tonnes of flat products.