Calcutta, Sept. 6: Durgapur Steel Plant (DSP), the ailing constituent of the Steel Authority of India Ltd (SAIL) has decided to set up a wire rod mill and a bloom caster in order to reduce semi-steel (semis) in its product mix and fetch better sales realisation.
While the wire rod mill will be set up at an investment of around Rs 150 crore, the bloom caster will need over Rs 200 crore worth of investment.
Confirming the development, DSP spokesperson said plans for the wire rod mill have already been firmed up. The mill, when in place, will have a conversion capacity of three million tonnes, he said.
Presently, DSP’s product mix is heavily loaded with semis which contributes more than 50 per cent of overall saleable products which affects the net sales realisation substantially.
DSP sources said the construction of the mill will start during the current financial year itself and IFCI has already been approached for the required funds.
“IFCI has studied the project and shown interest in it. We don’t think funds will be any problem for the project,” they added.
The mill will utilise the idle assets of the plant to scale down overall costs, they said.
Sources also noted that a large portion of DSP’s billets are sold in the market as semis, which after conversion by the re-rollers, provide stiff competition to the plant’s merchant mill products.
“The mill will not only help add value to our product mix but it will also prevent competition to a large extent for its own merchant mill products,” they said.
The bloom caster, on the other hand, will help the company cut production costs by Rs 1,000 per tonne once it is set up. The bloom caster is planned to be set up in the Tenth Five Year Plan.
“Since the plant operates with the age old ingot route for around 50 per cent of its steel production, the cost of rolling becomes more. And it is primarily for this purpose that the bloom caster would be installed to reduce the expenditure and operating costs. Moreover, the bloom caster will help make the job much easier,” they added.