Steel Exchange India Limited (SEIL) is planning to invest about Rs 1,500 crore over the next five years to augment its steel production capacity to 1 million tonnes by 2015. The company on Saturday commenced production at its Rs 300 crore integrated steel plant at Kothavalasa in Vizianagaram district.
“Our steel TMT bars production capacity has now increased to 300,000 tonnes per annum. In the same premises, we would set up a 1.2 million-tonne capacity pelletisation plant to produce high-grade iron ore pellets. The plant is expected to be completed by 2013. Apart from this, we are proposing to set up a 700,000-tonne capacity blast furnace, basic oxygen furnace and electric arc furnace plant to produce special quality steels by 2015,” B Satish Kumar, managing director of SEIL, told reporters.
Kumar said SEIL was also constructing a 60 Mw power plant in the same premises, which would be ready by 2012. “All these projects, involving an investment of about Rs 1,500 crore, will be funded through a debt of Rs 1,000 crore and an equity component of Rs 500 crore,” he said.
Of the Rs 500 crore equity, he said, about Rs 300 crore would be private equity while Rs 200 crore would be raised through internal accruals. If necessary, the company would come out with a follow-on public offering. The company’s current market capitalisation stood at about Rs 203 crore.
In 2009-10, SEIL achieved a turnover of Rs 709 crore, almost same as the preceding year. In the current year, the company is targeting a turnover of Rs 750 crore. The company envisages that its annual turnover would go up to Rs 4,000 crore following the completion of the proposed projects.
SEIL marketing director, V V Krishna Rao, said the company would be expanding its marketing network across southern states by setting up new branches and appointing more dealers.
