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Our Bureau

ISMT will provide the detailed engineering, design, procurement, and construction management for the project.

Pune , Jan. 2

PUNE-BASED precision seamless tubes and specialty steel manufacturer Indian Seamless Metal Tubes Ltd (ISMT) has signed a proposal of cooperation with Boulder Steel Ltd of Australia and Breitenfield Group of Austria for the setting up of a seamless tubes and steel mill in Australia.

ISMT has agreed to provide technical and engineering services and this could earn substantial equity and be the major shareholder in the joint venture project. Mr O.P. Kakkar, Managing Director of ISMT, said this proposal of cooperation between the three parties for the $300-million project is for manufacturing 3.5 lakh tonnes per year of seamless tubes. The turnover of the proposed joint venture, at current prices, would be about $400 million.

It is envisaged that the capacity would be increased to one million tonnes per annum in the future. ISMT would provide the detailed engineering, design, procurement, and construction management for the project.

Mr Kakkar said for these services and some financial contribution, ISMT can earn up to 35 per cent equity and would be the operator of the joint venture. The required agreements for taking the project forward would be signed between the parties in the due course. He said that ISMT would use its international marketing network and expertise to market one lakh tonnes of seamless tubes from this joint venture.

Mr Kakkar noted that the proposal is "the first of its kind with companies from three continents pooling in their technical expertise to make available globally acceptable quality of seamless tubes at the most competitive prices".

Queensland in Australia has been identified for the project. It offers cost advantage in respect of raw materials, energy, and skilled labour and the project would be set up there. He said the promoters feel that this joint venture would be able to produce the lowest cost seamless tube in the world. The Queensland Government has assured facilitation and financial support for the joint venture, he said.

Mr Kakkar also pointed out that "we have been operating internationally for a long time as manufacturers of seamless tubes, but this project would provide us with the challenge of setting up and operating a plant in a different cultural environment".

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