Financial Daily from THE HINDU group of publications
Friday, Nov 15, 2002
Casting flux powder for steel cos Stollberg's Durgapur unit ready for launch
KOLKATA, Nov. 14
STOLLBERG GmbH, Oberhausen, Germany, has set up a Rs 27-crore plant in Durgapur to make casting flux powder, an import substitute product. The project is being implemented through Stollberg's 100 per cent subsidiary Stollberg India Pvt Ltd.
Company sources said this was the first such project from the SKW Mettalurgie AG, which is the holding company of Stollberg GmBH. The other plants of the group making the same product are located in the US, Germany, France (which is an acquired plant), Korea and Brazil.
Referring to the product, sources said that casting flux powder is used in the caster during steel making and is described as the lifeline of a caster. Most of the demands of the Indian steel industry are now being met through imports, with Stollberg being a major source of supply.
However problems regarding servicing the customers and the high inventories that the customers were being forced to carry influenced the investment decision (to come close to the market), which was finally taken around 1998-99, sources said.
The project is billed as the State's first 100 per cent foreign direct investment.
The project has been set up with a mix of equity and external commercial borrowing by the holding company.
The company - Stollberg India Pvt Ltd - was set up in June 1999. The plant has a capacity of producing 7,000 tonnes per annum of the casting power and its auxiliary materials.
As for the factors influencing the decision to set up a plant in Durgapur, sources said that the concentration of steel plants around this region, and the high skill base in Durgapur was among the major factors that helped the overseas group choose the site.
Apprehensions about the notoriety of the workforce here were also quickly overcome. "The Government's assurance and our experience so far has proved that the decision has been a right one,'' top company sources said.
The project is slated to be inaugurated by Mr Mrinal Banerjee, MLA from Durgapur, and the State power minister.
The German Consul General, Mr E. Zander, and a crop of top executives from the group including the CEOs of the two holding companies and those in the US and Korea would also be attending the plant inauguration.
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line