Ispat completes trial run of expanded unit at Dolvi

Ispat Industries earlier this week conducted a successful trial run of its ramped-up 3.45 million tonne Dolvi plant in Maharashtra.

The expanded unit is expected to commence commercial production "very shortly," said a source from the industry.

The company had implemented the Rs 1,100 crore expansion plan in phases: from 2.4 million tonne per annum (mtpa) to 3 million and later to 3.4 million tonne per annum. This week's trial run marks the completion of its expansion to the 3.45 mtpa level.

As part of the plan, Ispat has also commissioned a 2.24 mtpa sinter plant at the Dolvi facility. This is the company's first sinter plant.

Moreover, another facility - a 1,260 tonne a day oxygen plant - has also been commissioned.

"Both the facilities are a first for the company. Earlier oxygen was sourced from outside. Along with the sinter plant, the oxygen unit will reduce the company's cost of production by 10 per cent," said the source.

Apart from the new facilities, Ispat has two blast furnaces, including an electric one. It is claimed to be the only steel company to have both kinds of furnaces, enabling Ispat to use varied types of raw materials including scrap and pellets. Ispat also has a sponge-iron plant.

In a related development, Ispat has increased prices of its hot-rolled oils by Rs 2,000 a tonne. This follows the price hiked by other major steel manufacturers last week.

"Internationally too, there has been an increase in the steel prices in the US, Europe and Chinese markets by about $50 per tonne. This trend is expected to continue for another sox months," said the source.

The price hike and the reduction in manufacturing costs with the coming up of new facilities, is expected to prop up the company's margins.

Last week, Ispat's holding company, Global Steel Holdings, had signed a 20-year management contract with the Zimbabwe government to upgrade and operate Zimbabwe Iron and Steel Company.