Neo Metaliks plans steel unit

Neo Metaliks, promoted by hosiery goods manufacturer, Rupa & Co, is planning to set up a 1.5 million ton steel plant in West Bengal.

The company had submitted a proposed to the state government and was awaiting feedback.

Ravi Agarwal, director, Neo Metaliks said, the investment in the project would be Rs 2,500-3,000 crore in the project.

The plant would produce long products and value added material. The company has also sought coal linkages from the government and plans to use pellets for the plant.

Agarwal said, a pellet plant would be set up in Jharkhand or Chhattisgarh.

The pellet plant would have an initial capacity of 0.5 million tonne and was likely to cost Rs 100-150 crore. Neo Metaliks has applied for iron ore mining lease in Jharkhand, Orissa and Chhattisgarh. For coal blocks, the company is tapping Madhya Pradesh, Jharkhand and Chhattisgarh.

Agarwal explained that the company chose Bengal to set up the plant because the group was Kolkata-based. Neo Metaliks has an integrated steel plant at Durgapur in West Bengal.

In the first phase, the company is eyeing 150,000t of pig iron capacity along with captive power plant of 4.5MW.

Agarwal said, Neo Metaliks was planning a forward integration programme, which could entail either manufacture of auto casting or high grade alloys. "A decision will be taken in the next 2-3 months," he said. In 2007-08, Neo Metaliks was likely to achieve a turnover of Rs 300 crore and in 2008-09 Rs 1,000 crore.

Agarwal said, the turnover in 2008-09 would come from the existing project at Durgapur and trading activities.

The company plans to commence trading in iron ore and other minerals.