Finnish steel firm plans Rs 1103 crore plant

Finnish stainless steelmaker Outokumpu is likely to invest Rs 1,103 crore in setting up a cold rolling mill in India.

The plant will have a capacity of 250,000 tonnes. Yatinder Suri, country manager, Outokumpu India, said the company was in the process of undertaking a feasibility study and a decision on the location would be taken early next year.

"The board has made up its mind that India will be a major market for Outokumpu. By 2015, Outokumpu wants to be a preferred supplier of stainless steel in the world," explained Suri. In 2006, Outokumpu recorded sales of Rs 33,110 crore, of which 95 per cent was generated outside Finland.

The location for the plant will be based on infrastructural support that the state governments will provide and port linkages.

The plant will be set up in the western part of country. Suri said it would have to be closer to the port and the end-user market.

"The west is the biggest market for stainless steel," he said. The toss-up is likely to be between Gujarat and Maharashtra. The port linkage is critical for the venture since the hot rolled feedstock would be shipped from Finland.

The cold rolling plant may use some of the equipment at its Sheffield cold rolling mill, which was closed in 2006.

Outokumpu has also decided to set up a greenfield stainless steel service centre in the western part of the country. The service centre is likely to be operational in the first half of 2009 at an investment of Rs 165 crore.

The service centre, with an annual capacity to stock and process 50,000 tonnes of stainless steel coils, is expected to complement the services that Outokumpu's Indian sales office has been providing to Indian customers.

Outokumpu India, a wholly owned subsidiary of Outokumpu Oyj, was set up last year to cater to the Indian market. The Indian arm has set up a number of sales and marketing offices in the country.

"We will bring new grades of stainless steel to India, which will be used for critical applications," said Suri. At present, stainless steel grades are used primarily for kitchen appliances and architectural requirements.

Outokumpu joins the growing club of foreign steelmakers ""Marcegaglia, Stemcor, Posco, Mittal Steel, Sinosteel, Nippon Steel Corporation and Kobe Steel "" looking to tap the Indian market.