Shyam Steel to invest Rs 100 cr in sponge iron, power units

Shyam Steel Industries has lined up an investment of Rs 100 crore to set up new facilities including a sponge iron and captive power plant in Durgapur (West Bengal) to meet an expected growth in volumes.

The long steel products maker also plans to invest an additional Rs 50 crore to set up a mini blast furnace in a bid to become a fully-integrated steel producer, Shyam Sunder Beriwala, chairman, said.

The Kolkata-based company manufactures long steel products for downstream users such as construction, grill, tube and pipe makers. It has two plants, one each in Howrah and Durgapur respectively. The plants have an annual capacity of 200,000 tonne.

He said the sponge iron and the power plant would drastically bring down the production costs when completed by the end of 2005.

"Our turnover should grow to Rs 300 crore during this financial year from Rs 225 crore during 2003-04," said Beriwala.

While Rs 24 crore would be used for a steel rolling mill, an additional Rs 26 crore would be invested for a comcast plant to make billets, which is used in the manufacturing of steel.

The remaining Rs 50 crore has been allocated for the sponge iron and captive power plant.

The privately-held firm is now exploring taking iron ore mines on long-term lease in Orissa but Beriwala said such a task would take time due to the various rules of the Orissa Mineral Development Corporation, which hinder such leases for small sponge iron producers.

According to him, about 16-17 small sponge iron producers are planning to join hands under the aegis of the Bengal Sponge Iron Manufacturers Association to jointly take iron ore mines on lease.