Visa Steel, Baosteel to set up ferrochrome unit

Kolkata-based Visa Steel Ltd, an emerging integrated special and stainless steel player, today entered into a joint venture with Baosteel Trading Co Ltd of China and a group company Visa Comtrade AG, Switzerland, for setting up a 100,000-tonnes-per-annum ferrochrome plant in Orissa.

The joint venture will be named Visa Bao Limited, in which Visa Steel, Baosteel and Comtrade will have 51 per cent, 35 per cent and 14 per cent respectively.

The cost of setting up the ferrochrome plant and related infrastructure is estimated at Rs 260 crore, which will be financed by a debt:equity mix of 65:35

A substantial part of the production is likely to be exported to China, where Baosteel is the largest steel company with a capacity of 24 million tonnes per annum.

The agreement for the ferro chrome venture was signed in Shanghai by Vishal Agarwal, managing director VISA Steel, Li Qing Yu, president, Baosteel Trading and Vivek Agarwal, executive director, Visa Comtrade. Vishambhar Saran, chairman, Visa Group, and Xu Le Jiang, chairman, Baosteel Group, attended the ceremony.

Vishambhar Saran, chairman, Visa Group, said, "This JV takes our relation with Baosteel a step forward. It ensures a win-win situation for both companies through a stable supply of ferro chrome for Baosteel's stainless steel plant in China and a long-term market for the JV."

Baosteel is the third foreign company to enter India after Posco and Mittal Steel.

Others eyeing investments in steel here are Marcegaglia, Siosteel, Nippon Steel and Kobe Steel.

Visa Steel is setting up an integrated 1.5 million tpa special and stainless steel plant at Kalinga Nagar Industrial Complex, where it already operates a blast furnace of a capacity of 225,000 tpa for pig iron and a stamp-charged coke oven plant of 400,000 tpa. It also has a chrome ore beneficiation plant and a chrome ore grinding plant with capacity of 100,000 tpa each at Gopalgaon in Orissa.

At Kalinga Nagar, a 50,000 tpa ferro chrome plant is expected to go on stream soon. The company will commission a 300,000 tpa sponge iron plant and a 50 MW waste heat recovery power plant by the end of this fiscal.

The 50 lakh tpa special and stainless steel plant, including a bar and wire rod mill, and an additional 25 MW power plant will get going by end 2008-09. Baosteel Trading is the designated company in Baosteel Group Corporation for overseas investment in resource development to support the raw material requirements of Baosteel's plants in China and has the sourcing rights for imports of ferro chrome into China for consumption by Baosteel and its affiliates.

Visa Comtrade is the international trading, shipping and logistics arm of the Rs 2,000-crore Visa Group, providing global supply chain solutions for energy products, minerals and metals.

Headquartered in Switzerland, the company has a network of offices from Australia to China, in Indonesia, Singapore and the UK.

The Visa Group has had its office in Beijing since 1994 and Visa Comtrade has been active in sourcing coal and coke from China as well as supplying chrome ore concentrates and iron ore, ferro chrome and non-ferrous products to China.