Calcutta, Feb. 12: The Ruchi Group of Industries has submitted a proposal to the Bengal government to set up a 1 million-tonne integrated steel plant in the state.

Confirming the development, state commerce and industry secretary Sabysachi Sen told The Telegraph, ?We have shown them land at Kharagpur. The group already has a refined oil unit at Haldia.?

Ruchi Soya, a group company, has set up a refined oil plant in the state at a cost of Rs 52 crore.

The total investment for the greenfield steel plant is Rs 2,500 crore.

Earlier, the Jindal group had announced plans to set up a 5 million-tonne greenfield steel plant in Bengal. The total cost of the project is Rs 10,000?Rs 12,000 crore.

Steel is, however, not a new line of business for the Indore-based Rs 3,534-crore Ruchi group. National Steel and Agro Industries (NSAIL), a group company, was set up in 1985 to manufacture galvanised plain steel coils and corrugated sheets. It was set up in technical collaboration with CMI and Phoenix Works of Belgium and Stein Heurtey of France.

The initial capacity of the NSAIL plant was 35,000 tonnes per annum, which has now been enhanced to 1.4 lakh tonnes per annum.

The company went in for backward integration in 1992 and had set up a 1 lakh-tonne cold-roll mill. It manufactures ultra-thin gauge GP and GC sheets under the ?Appu? brand. The company exports 35 per cent of its total output to Southeast Asia, Africa, West Asia and other neighbouring countries.

The Ruchi group will source iron ore from Jharkhand for its plant in Bengal.

Commerce and industry department officials said talks on sourcing of iron ore between the Bengal government and its counterpart in Jharkhand were initiated but was discontinued because of elections in Jharkhand.

Explaining the rationale behind companies setting up steel plants in Bengal, experts said the country?s consumption of iron and steel is expected to increase by over 7 per cent per annum for the next five years, primarily driven by the demand from the infrastructure, automobile and white goods sectors.

In Bengal, apart from the urban demand, a substantial demand is also expected from the rural sector. This is because the state has witnessed substantial growth in agriculture in the last two decades, because of which rural purchasing power has risen substantially.

The region in and around the state (Bihar and Orissa) accounts for 48 per cent of iron ore, 62 per cent of bauxite and 49 per cent of copper available in the country.