Government owned steel company, Steel Authority of India (SAIL) says it may invest INR 20-24 billion ($241-289.24 million) into its IISCO Steel Plant (ISP). This investment will be used to set up a four million tonne/year greenfield steel plant by its pre-existing steel site located in Burnpur, West Bengal, Kallanish notes.
The company states this new steel plant will produce high quality hot rolled coils. The newly produced HRC will have applications in the automotive industry, amongst other areas.
ISP director-in-charge Brijendra Pratap Singh told the Press Trust of India, “We have received in-principle approval for the greenfield plant which will produce flat HR coils, targeting grades like API (American Petroleum Institute) and automotive among others.”
Singh notes that SAIL’s board approval is still pending, however it is expected shortly. He adds that the specific capital expansion and investment details will be fixed during the Tendring process, and that the steel plant will be completed in the next three to four years.
This move is part of SAIL’s broader strategy to expands its steel production capacity and help support India’s infrastructure and defence projects.
In November, SAIL announced its plans to increase production capacity from 20 million tonnes/year to 35m t/y, noting it will add 15m t/y of capacity in phase 1. It also plans to set up new technologies and develop logistics infrastructure (see Kallanish passim).
SAIL announced a wider investment plan of INR 1 trillion to fund this expansion strategy in the next few years. It plans to have a debt to equity ratio of 1:1. SAIL’s capital expenditure for the financial year ending in March (FY24) is INR 55 billion, of which it has already spent INR 21 billion in the first six months of the fiscal year ending in March 2024.
SAIL’s ISP has a current crude steel production capacity of 2.6m t/y and is primary involved in the production of finished products. ISP is targeting a revenue of INR 115-120 billion in FY24.