RINL in Rs 17,800 cr expansion move

Rashtriya Ispat Nigam Ltd (RINL) has drawn up a Rs 17,800 crore investment plan to expand capacity from 3.5 million to 10 million tonne by 2012.

B K Panda, chairman and managing director, said that the company intends to meet a good part of the investment from internal accruals.

RINL will deploy Rs 2,400 crore for the initial Rs 3,000 crore expansion programme that will raise capacity to 5 million tonne by 2008. The balance money would be brought in by a BOT partner to be finalised for the implementation of the project.

The feasibility report for the expansion is expected to be completed in a month and a half.

RINL is also awaiting gas linkage for the expansion. Gujarat Petrochemicals, ONGC and GAIL have offered supplies.

The company plans to raise special steel production to 50 per cent of its saleable steel.

It's third phase of expansion will be dedicated to flat steel production, Panda said. RINL is also keen to produce coloured steel.

The company has set up a strategic management group under the CEO to choose the technology to be imported for the expansion project.

While Russia remains the destination up to the blast furnace level, it is Europe (Germany, Italy or Austria) that will provide technology required for steel making.

"Japanese technology is prohibitive cost-wise," Panda said.

In 2003-04, the company recorded a 22 per cent increase in turnover to Rs 6,174 crore. Cash profit stood at Rs 2,023 crore, while net profit rose 197 per cent to Rs 1,547 crore.

RINL officials are confident that accumulated losses of Rs 2,914 crore will be wiped out in the next two years.

For the current fiscal RINL has set itself a turnover target of Rs 7,000 crore.