The Hindu Business Line : SAIL, Steel Complex MoU to be signed next month

The State-owned Steel Complex Ltd (SCL) is set to sign a memorandum of understanding with Steel Authority of India Ltd (SAIL) in the first week of May to form a joint venture company.

The State Cabinet had last month cleared the MoU, which envisages equal equity participation by the two companies in the new company.

In the first phase, the company will take up manufacture of 50,000 tonnes of TMT bars a year with an investment of Rs 50 crore. The value of the assets of SCL will be its equity contribution and the valuation is being done by SBICaps.

According to officials in the Industries Department, SAIL will chip in an equal amount as its equity and, if required, it will also extend a loan to meet the projected investment in the new TMT bars facility.

Capacity addition

It may be noted that a couple of officials from SAIL have been working at SCL’s plant in Kozhikode for more than a year to raise its billet production capacity from the existing 20,000 tonnes to 50,000 tonnes a year through optimisation of process parameters and maintenance practices of the electric arc furnaces and the billet casters. The task has been completed ahead of schedule.

The officials said that installation of a blast furnace was also planned in the long term. The minimum capacity for a blast furnace is three million tonnes and the expansion plans will depend on the availability of iron ore.

Infrastructure

Also, the required infrastructure such as rail and road connectivity will have to be put in place for the movement of iron ore. Early development of Beypore port near Kozhikode is also necessary for the purpose.

The new company will be managed by SAIL and the products marketed under its brand name.

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