Calcutta, Nov. 25: Electrosteel Steels Ltd has achieved financial closure for its upcoming 2.51-million-tonne plant at west Bokaro in Jharkhand, paving the way for the completion of one of the few heavy industry projects to get off the ground recently.

The company, promoted by Calcutta-based ductile iron pipe maker Electrosteel Castings Ltd and Stemcor of the UK, tied up around Rs 2,200 crore, with the State Bank of India as the lead banker.

The company hopes to complete the project by the end of this fiscal.

“We have started off with some of the component of the plant such as pig iron and TMT bar being produced already. Come April, we will start producing DI (ductile iron) pipe, wire rod and billet as well. The company is expecting to reach 80 per cent capacity utilisation in the next fiscal,” Ashutosh Agarwal, executive director (finance) of Electrosteel Steels Ltd, said.

The company has used Chinese technology, equipment and engineers to set up the plant. However, it had to delay the import of some of the equipment for want of cash.

The total project cost has been fixed at Rs 9,562 crore. Even though there has been some delay in the execution with the Centre holding back visas to many Chinese engineers, Electrosteel will still be counted among one of the very few steel plants to reach completion in a new location in the last 6-7 years.

Despite a spate of announcements by both domestic and international majors, including Posco, the Mittals and the Tatas, only two other significant projects are actually getting off the ground.

Jindal Steel and Power Ltd and Tata Steel have achieved some progress in setting up facilities in Odisha’s Angul and Kalinganagar, respectively. Scores of other projects are mired in delays over land acquisition, mine allocation and environmental clearance.

The production of steel has failed to catch up with the growth in its consumption, resulting in an increase in import. Consumption has gone up 6 per cent, while output has grown 3 per cent.

Most of the new capacity addition in the last eight years has been on existing locations, with Steel Authority of India Ltd leading the pack followed by Sajjan Jindal’s JSW Steel and Tata Steel.

According to analysts, Electrosteel Steels is unlikely to face any challenge in selling its product if it sets a good quality standard.

The company has managed to secure coal and iron ore linkages through its parent Electrosteel Castings.