Bhopal company bags $15 mn Iranian technology contract

HEG will provide technical know-how for electrode plant, to invest Rs 500 crore in MP

The Bhopal-based HEG Ltd, the leading graphite electrode manufacturer, has bagged a $15 million contract from Iran's largest steel company to provide technical assistance in setting up an electrode plant there.

"The company has won as part of an international consortium the mandate to supply technical know-how to the National Iranian Steel Company (Nisco) following a global tender," Ramesh C Surana, HEG executive director, said here yesterday.

A premier company of the LNJ Bhilwara group, HEG is located in the Mandideep industrial area of Madhya Pradesh. "With this contract we are poised to become a major global player," Surana said.

The other four participants in the consortium are Iritec (Iran), which will build the plant, Irasco (Italy), which will be responsible for project financing and equipment purchase and procurement, Itok (Iran) and SCS (Germany), a sub-consultant appointed by Itok.

According to the agreement, (the tender for the project was floated in July 2003), a consideration of $15 million would be payable to HEG over the four-year period till the new plant was commissioned, Surana said.

Even after four years, HEG would continue to provide technical assistance and management support to Nisco for five years after the commissioning of the plant under an optional collaboration agreement, he said.

The new plant, being set up at Ardakan in the Yazd province of Iran at an estimated cost of Rs 1,100 crore, will have a capacity of 30,000 million tonnes a year.

The plant is expected to be commissioned in four years. But Nisco will have to use the HEG channel for entering the graphite electrode exports market.

Meanwhile, Surana said the company would make a fresh investment of Rs 500 crore in Madhya Pradesh to increase the capacity of its Mandideep plant from 30,000 million tonnes to 60,000 million tonnes a year.

The company will also set up a 30 Mw captive power plant in its premises.

"The capacity increase will be done in two phases. In the first phase, the capacity will be increased to 52,000 million tonnes. The captive power plant will be set up at an investment of Rs 98 crore," he said.

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Reaching out

• As per the agreement signed on May 12 in Tehran, $15 million will be payable to HEG over the four-year period till the commissioning of the plant
• Nisco will have to use the HEG channel for entering the graphite electrode exports market
• The company plans to make a fresh investment of Rs 500 crore in Madhya Pradesh to increase the capacity of its Mandideep plant from 30,000 million tonnes to 60,000 million tonnes a year
• HEG will also set up a 30 Mw captive power plant in the Mandideep unit at an investment of Rs 98 crore