Kalyani Gerdau Steels Ltd, a joint venture between Kalyani Group and Gerdau Group from Brazil, has approached the International Finance Corporation, an arm of the World Bank, to seek a loan of $30 million for its $46-million steel plant expansion at Tadipatri, Andhra Pradesh.
The proposal had been submitted to IFC on March 30 and IFC's board of directors is expected to take it up at its meeting scheduled for April 30.
Kalyani Group, in an e-mail response, said, “The loan is for our steel plant in Andhra Pradesh, a joint venture with Gerdau, Brazil for certain capex requirements.” IFC has proposed to partly finance by providing a loan of $30 million to the joint venture. The project covers the development and capacity addition of the steel plant and the 12-Mw waste heat recovery-based power plant.
Kalyani Group and Gerdau SA Brazil had signed the joint venture in June, 2007, and according to the agreement, both the companies would have an equity partnership of 45% each in SJK Steel Plant Ltd, while the remaining 10% would be owned by other investors. SJK Steel, which was acquired by Kalyani Steels, is an integrated alloy steel plant located at Tadipatri in Andhra Pradesh, with an installed capacity of 275,000 tonne per annum. The plant started the production of pig iron in April, 2005, and is today runs at full plant capacity. The Kalyani Gerdau joint venture plans to enhance its capacity to 1.6 million tonne per annum of finished steel in the next few years.
According to the agreement, Kalyani Gerdau Steels would install rolling mills, which would allow the production of steel with higher added-value and supply to both, the automotive and civil construction industry, covering a broad range of special bar quality and construction products.
