Calcutta, Aug. 5: The Steel Authority of India Ltd (SAIL) is planning to merge ailing public sector company Bharat Refractories (BRL) with itself.
The company has completed the due diligence process and the merger is expected to take place within a year from now, a senior SAIL official said today.
Headquartered in Bokaro, Bharat Refractories was set up in 1974. The company is governed by the ministry of steel.
SAIL has major expansion plans in the next five years — the company aims to increase output from 14.5 million tonnes to 22.5 million tonnes at an investment of Rs 37,000 crore.
Merger with Bharat Refractories will give it an in-house source of refractories used in blast furnaces. BRL has four such units, three in Jharkhand and one in Chhattisgarh (Bhilai). The company meets close to 50 per cent of the refractories requirement of SAIL’s Bokaro Steel Plant.
BRL manufactures a wide range of refractories, but it is yet to catch up with the changing needs of modern times.
“We will give BRL all our support so that it can cater to our needs,” said V.K. Srivastava, managing director of Bokaro Steel Plant.
However, Srivastava, who was speaking on the sidelines of the 45th annual general meeting of the Indian Refractory Makers’ Association in Calcutta today, added that BRL might not be able to meet all the requirements of SAIL since its capacity is small and it does not make all kinds of refractories.
Incidentally, Bharat Refractories is the fourth company SAIL plans to merge with itself.
SAIL is planning to acquire Neelachal Ispat Nigam (NINL) of Orissa, Maharashtra Elektrosmlet Ltd (MEL) and National Iron & Steel Company Ltd (NISCO) in Bengal.
While MEL is a wholly-owned subsidiary of SAIL, NISCO is a Bengal government-owned steel rolling mill. NINL is jointly owned by MMTC and the government of Orissa.
The Indian refractory market was about 10 lakh tonnes a year in 2005-06. This rose 8 per cent last fiscal.
Durgapur Steel Plant
SAIL has approved a bar-and-rod mill for Durgapur Steel Plant (DSP) at an estimated cost of Rs 737.96 crore. The mill will have an annual capacity of 0.7 million tonnes.
The bar-and-rod mill will provide a much-needed variety to the product mix of Durgapur Steel Plant besides enhancing it’s finished component.
The mill will be able to produce bars and rods in the product range of 5.5 mm diameter and 40 mm diameter, thus offering a complete package for the construction segment.
The mill, to be set up with the latest technology and a maximum speed, will have state-of-the-art technology for stringent quality control, proper material identification with modern handling and packaging facilities.
Durgapur Steel Plant has attended a pre-bid conference with the prospective agencies on July 12 this year. Reputed international suppliers had participated in the conference.
“The mill will enhance our finished component in the product mix from a level of slightly over 40 percent to around 77 per cent,” said V. Shyamsunder, managing director of Durgapur Steel Plant.
The mill is expected to be commissioned within two years and will substantially improve the profitability of the plant.