Shah Alloys plans Rs 203cr plant in Gujarat

The Shah Alloys group is setting up a backward integration project in Guajarat for manufacturing sponge iron, ferro alloys and rolling mills for an investment of Rs 203 crore.

The project was being funded through promoters contributions to the tune of Rs 51 crore, rupee term loans of more than Rs 114 crore from banks and financial institutions and balance from the proceeds of its forthcoming IPO from SAL Steel Ltd.

The company's ferro alloys project with a total capacity of 61,890 tonne per annum would be manufacturing ferro chrome, low carbon silicon manganese, ferro silicon and ferro manganese. The sponge iron capacity would be 180,000 tonne per annum, while the rolling mills would have a 25,000 tonne per annum capacity.

Rajendra Shah, chairman of the company said, demand for the stainless steel is bound to increase in the coming years as the Indian Stainless Steel Development Association is in talks with Railways to use only stainless steel to manufacture coaches for distance trains and the surge in demand for steel from China due to infrastructure initiatives for hosting Olympics.