To add 3 mtpa capacity, increase power production
BMM Ispat Limited is adding capacity at its Hospet plant at a cost of Rs 6,700 crore. This is to set up additional 3 million tonnes of steel per annum at the plant.
“BMM Ispat is adding capacity adjacent to its existing facility and has plans to focus on producing long products, alloy steel for automobile sector and increase captive power production to 675 MW from 235 MW produced currently,” said Dinesh Singhi, Managing Director BMM Ispat Ltd.
“When capacity addition is competed in 2014, BMM will be a 5 million tonne per annum company,” he added.
According to Laxmipat Dudheria, finance director BMM Ispat, “The total steel production capacity addition cost is Rs 6,700 crore. The promoters are bringing in Rs 2,500 crore as their share and the balance Rs 4,200 crore is debt financed by a consortium of 16 banks led by State Bank of India.”
The company, located in Hospet, in Karnataka’s Bellary district, currently produces 2.5 million tonnes of pellets, one lakh tonnes of TMT bars, seven lakh tonnes of sponge iron for domestic market and 235 mw of captive power.
SBI’s corporate accounts group has committed Rs 1,010 crore for the project. “SBI has taken a bold step to fund the company despite its size. Also in the last few years it has been challenging for the steel industry. It is expected to continue for few more years as legal issues are being addressed,” said S. B. Nayar, Deputy Managing Director and Group Executive Corporate Banking, SBI.
The company is exploring Chhattisgarh, Jharkhand and Orissa for iron ore procurement.
“We have already sent our procurement teams to these states. We are forced to do this as there is no quality ore available in Karnataka,” said Singhi.
At e-auctions in Karnataka, the company so far has bought 2.8 million tonnes. Singhi further said the project will provide 4,000 additional direct employment opportunities and about 10,000 indirect employment. About 82 per cent of the workforce will be hired locally in Bellary district. The process of hiring has already begun and will be completed in next 1-2 years.