KIOCL, the 100 per cent export oriented public sector unit, is putting up this new project, adjacent to their existing pig iron plant in Mangalore on the west coast. The existing pig iron plant has a capacity of 200,000 tonne per annum.
While, L&T's engineering and construction group has tied up with Dalian Wanton Industrial Equipment Company, Sigma Minment has formed joint venture with China National Metal Products, an import-export firm to bag this project.
KIOCL, which is basically an iron ore mining company, ever since it was banned in 2006 from mining in the pristine western ghats, has been taking up various measures to keep itself in shape.
"We have enough money, trained manpower and technology to run a ductile iron spun pipe plant. We want to keep the company alive by making use of the opportunities available in the market," said K Ranganath, Chairman-cum-Managing Director, KIOCL, who recently took over the top position.
The proposed plant will utilize the superior quality pig iron having low phosphorus and low sulphur, which is already produced by the company. Ductile iron spun pipes are used in most of the advanced and developing countries because of its superiority over cast iron spun pipes. Even in India, there is a huge demand for spun pipes from various state governments, urban development bodies. They are used in irrigation projects, drinking water supply and sewerage projects and other large infrastructure projects.
Presently, companies like Electrosteel and Jindal Steel Works, in the private sector manufacture ductile iron spun pipes. The consumption is projected to go up by 40 per cent to one million tonnes per annum from 700,000 tonne presently in the next two-three years to meet the growing infrastructure demands of cities, towns and tertiary areas.
KIOCL decided to set up DISP plant as part of its diversification plans to enter into manufacture of value added products by effective use of iron ore pellets.
Ranganath said that in response to their global tender floated in April this year, they have received five bids from overseas and Indian firms jointly, of which two Chinese firms with their Indian partners have been pre-qualified. "We have asked for some technical clarifications from another company and once they submit the details, we will open the tender documents and finalise the bidder," he added.
KIOCL will be funding this project through internal accruals and as of March 31, 2008, it has a cash reserve of Rs 1,468 crore.
The entire process will be completed by this month-end and the bids will be opened for ascertaining the quoted price. The lowest bidder (L1) will be short-listed for executing the project in 20 months, Ranganath told Business Standard.
The turnkey project also involves technology transfer by the successful bidder to Kudremukh for operating the new plant and its subsequent expansion to meet the growing requirements in the domestic market.
