Mumbai, Feb. 3: Buoyed by the rise in steel prices, growing demand and debt restructuring measures by financial institutions, Ispat Industries (IIL) has decided to double its production capacity to 3 million tonnes from the existing 1.5 million tonnes. The total investment for the project would be around Rs 600 crore.
Confirming the move, Ispat director (finance) Anil Sureka said the steel plant at Dolvi near Mumbai is modern and can become one of the most cost-effective plants in the world. The increase in capacity will be done in two phases. The first phase, which will be completed by September 2003, will see a rise in capacity to 2.4 million tonnes per annum. The second phase will be completed by June 2004, he said.
Out of the total investment of Rs 600 crore, a new oxygen plant will need Rs 120 crore and another Rs 200 crore will go towards setting up a blast furnace.
Sureka said the investment would mostly come from internal accruals. The company is on the verge of making a cash profit of over Rs 550 crore in the current fiscal due to the price stabilisation in the steel market. “This will certainly help to expedite our expansion plans,” he said. Having received a major concession from the corporate debt restructuring (CDR) forum, Ispat hopes to be among the world’s top-five lowest cost producers of steel by 2005.