The Hindu Business Line : RKKR plans Rs 500-cr steel project at Krishnapatnam in AP

Chennai, July 12 The Chennai-based RKKR Steels Ltd intends to put up a Rs 500-crore integrated steel project at Krishnapatnam, Andhra Pradesh, the company’s Director, Mr Rajiv Rai, told Business Line.

Facilities

The plant will comprise a sinter facility and a blast furnace with downstream steel making and rolling facilities to manufacture alloy and special steel required by the automotive and engineering sectors, Mr Rai said.

The plant is being put up under a special purpose vehicle, SBQ Steels Ltd. ‘SBQ’ stands for ‘special bar quality’— an industry term used to refer to the very special steel grades used by the auto and engineering industries. The facility will have a capacity to produce five lakh tonnes of pig iron making and 2.5 lakh tonnes of steel.

The AP Government has allotted 250 acres of industrial land for the project and preliminary site work has been completed.

Financial closure is expected by the end of this month. The project will be executed in two phases. The first will consume investments of Rs 200 crore, of which debt will be Rs 130 crore.

Iron ore plant

Mr Rai said that iron ore for the plant would come from mines in Bellary. SBQ Steels will buy fines, which are cheaper, and sinter them for putting into the blast furnace. Technology for iron making is being sourced from TRF Ltd (of the Tata group).

The company is in negotiations with a few Japanese steel manufacturers for steel making. “Certification by auto majors is a necessity for a unit like ours and hence the technical tie-up is important,” Mr Rai said.

SBQ Steels will initially buy coke from abroad, but over time, may put up its own coking plant or buy coke from the various merchant coke units that are coming up in the country. Also, part of the project is a 16 MW waste-heat recovery power plant.

Mr Rai said that at a later stage the company would come out with a public issue.

The RKKR Steels Ltd has been a producer of construction grade steel for over 50 years. “Now the group is looking to entry into special steels segment,” he said.