The Hindu Business Line : Visa Industries to set up Rs 1,700-cr integrated steel plant in Orissa

WITH the steel sector projected to grow for the next couple of years, big investments have again started coming into greenfield projects. The Kolkata-based Rs 1,100-crore Visa Group of Industries is setting up a one-million-tonne steel plant at Jajpur in Orissa.

The group flagship — Visa Industries Ltd — will be setting up an integrated steel and stainless manufacturing facility with an estimated investment of Rs 1,700 crore. Of the total investment, about 40 per cent, that is Rs 680 crore, would be equity and the remaining Rs 1,020 crore would be through debts.

The company is also planning to go public for which internal work has already started and clearance has been received from the Foreign Investment Promotion Board (FIPB) for increasing foreign equity in the form of fresh fund infusion.

According to Mr Rajesh Jha, Director of the company, the entire plan is divided in two phases.

"The first phase would account for 0.5 million tonnes and the second phase would be another 0.5 million tonnes, finally taking the total to one million tonnes," he said.

"The first phase would include one blast furnace, two directly reduced iron (sponge iron) units, two submerged arc furnaces, one arc furnace, one ladle reducing furnace, one concast, one argon-oxygen de-carburiser and one coke oven battery with four lakh tonnes capacity," he said.

The work has already started and the finances for the first phase are almost tied up.

The company has also received permission from the FIPB to increase foreign equity from the present 39.6 per cent to 47.41 per cent with fund infusion by Switzerland-based Visa Contrade AG, which is a wholly owned subsidiary of the Kolkata-based Visa International, the investment arm of the group.

Mr Jha said that the first phase of the project could commence commercial production by the first quarter of calendar 2006 though certain portions such as the mini-blast furnace, coke oven battery and two units of ferro alloys is expected to go on stream by the last quarter of the current fiscal.

Mr Jha said that already the work is progressing at a satisfactory pace.

"Already, the land had been acquired and construction work is on in full swing. Around 20 per cent of civil constructions and 30 per cent of structural fabrications are over," he said, and added that, "the company is also planning to go public in the foreseeable future."