The Hindu Business Line : Baldota group co setting up Rs 4,700-cr steel plant

Bangalore, Oct. 6 The Baldota Group is setting up a new Rs 4,700-crore steel plant, which will mostly manufacture products for passenger cars as well as auto parts producers based out of southern and western India.

The group company, Aaress Iron & Steel Ltd (AISL), which is setting up the project, expects to complete the first phase consisting of 1.2 million tonnes (mt) capacity by the end of 2010. The steel plant is being set up in Koppal in northern Karnataka.

The total capacity of the plant is expected to be around 5 mt. In the second phase, 2.5-mt capacity will be added with an investment of Rs 8,500 crore, Mr Shrenik N. Baldota, the executive director of AISL, told Business Line.

Investment source

Mr Baldota said two-third of the investment for the first phase will be raised through debt. “Even though the interest rates are high, we hope our pricing will be extremely competitive in the market,” Mr Baldota said.

“Over 60 per cent of the 1.2-mt capacity will be for the automobile sector,” Mr U.P. Singh, director with AISL, said. He said alloy steel grade, billets and wire rods will be manufactured during the first phase. The rest of the 5 mt will be utilised for making flat products, he said. Mecon will provide engineering and consultancy service for the project.

Market size

The current domestic market size for auto grade steel products is around Rs 12,000 crore and the total production size is around 2 mt. Car producers and autoparts manufacturers import about 0.2 mt of auto grade steel.

The current price of auto grade steel ranges between Rs 60,000 and Rs 70,000 per tonne in the domestic market. “We hope to target even those who import steel to expand our market size,” Mr Singh said.

AISL will, however, not make stainless steel because it will use a different technology which is not suitable for making such products, Mr Singh said.

Power plants

AISL expects to hire about 3,500 workers for the entire project which will need about 2,000 acres of land.

The company will also set up two power plants of 35 MW each near the steel plant. AISL plans to start work on setting up the second phase of the steel plant by 2009.

Related Stories:
Baldota Group setting up steel plant
Baldota Group to double wind capacity

More Stories on : Steel | New Projects | Karnataka

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page