The Hindu Business Line : IISCO plans to double capacity

THE Burnpur-based Indian Iron & Steel Co Ltd (IISCO) is working on a plan to increase its liquid steel production capacity from 0.5 million tonnes to one million tonne at a cost of around Rs 400 crore - Rs 500 crore.

According to Mr H.M.P. Singh, Managing Director of IISCO, the capacity expansion plan is in its initial stages and the final details will be worked out by IISCO team in consultation with Steel Authority of India Ltd (SAIL).

IISCO has currently undertaken several projects as per the revival package approved by the Board for Financial & Industrial Reconstruction (BIFR) for a turnaround, but this capacity expansion project is being considered separately.

"Our final target is to reach a liquid steel production capacity of 2 million tonnes by 2012 but as a first step we are hoping to increase it to one million tonne. It is not mentioned in the BIFR package, which mostly took care of the backlog projects," Mr Singh told Business Line.

When asked about the cost of the expansion programme, he said, it would be around Rs 400 crore to Rs 500 crore. The funding details of it are yet to be finalised.

The plan to increase capacity received a shot in the arm after Tuesday's development, when the Union Steel Minister, Mr Ram Vilas Paswan, announced that IISCO would be merged with SAIL. At present, it is a wholly owned subsidiary of the steel giant.

Mr Singh welcomed this development and said that every employee of IISCO is feeling upbeat after hearing the Union Minister's announcement. He agreed that funds would now be easily accessible for the development and modernisation of IISCO.

"Banks and financial institutions might have had some apprehensions before funding a project in IISCO but it would not be same any longer. SAIL itself has enough money to fund any project for the modernisation of IISCO," he said.

Regarding the modernisation of IISCO's mines, Mr Singh said several plans are being implemented. "Steps on manpower rationalisation are also on," he added.

As a part of IISCO's revival programme (worth Rs 341 crore), its Kulti works, which employed 2,500-odd people, was closed down in April 2003. Barring 355 people, all opted for a voluntary retirement scheme (VRS). The Union Government gave a grant-in-aid worth Rs 186 crore for the VRS.

Riding on the revival package, IISCO registered a net profit of Rs 27.09 crore in 2003-04 after 30 years.