RINL expansion work to start soon

The expansion of Visakhapatnam steel plant (VSP) of Rashtriya Ispat Nigam Limited (RINL) under the Ministry of Steel will start soon so as to commission the enhanced capacity within the stipulated time period.

"The ground work for the Rs 8,600 crore expansion plan has been completed and MN Dustur & Co has appointed as the chief consultants for the project", a senior official of the company said.

"The actual work however will start after the procurement of equipments from abroad", he added. Most of the equipments are being procured from Australia, Russia and UK.

Vizag steel plant, the only shore-based integrated public sector steel plant in the country, proposed to increase its hot metal capacity from 4.15 million tone per annum (mtpa) to 6.5 mtpa, liquid steel from 3.6 to 6.30 mtpa and saleable steel from 3.2 mtpa to 5.72 mtpa by the end of 2008-09 with an investment of Rs 8,600 crore.

Completion of the proposed expansion within the stipulated time period will not pose any difficulty as most of the infrastructure facilities like 280MW captive power plant and water supply system linked to the Godavari river are already available.

Moreover, there is no land acquisition problem, said P. Ram Prabhu, deputy general manager of VSP. The plant's vision is to enhance the capacity to 10 mtpa by the end of 2019-20.

This is in line with the National Steel Policy which envisaged production of 110 mt steel by 2020.

Out of the total project cost of Rs 8,600 crore for the expansion programme, the company will invest around Rs 4000 crore from internal resources while raising the rest funds from the financial institutes as loan.

By the completion of first phase expansion, the plant will add 2000 more manpower. The present manpower of the plant is about 16000.

Despite hauling raw materials from long distances and buying them at market prices as the company did not have any captive mining facility, the plant has been making profit since 2005-06. After wiping out all accumulated loses, the plant made a net profit of Rs 1251 crore in 2005-06.

The next year, the profit figure increased to about Rs 1560 crore. The annual turnover of the plant is pegged at about Rs 20,000 crore.