In talks with Orissa Govt for getting 3,500 acres more
Mumbai, Aug. 27 Delhi-based Bhushan Steel and Strips Ltd is planning a four-fold expansion from its present capacity of one million tonnes in the next five years.
The project, which will include two power plants, will entail an investment of over Rs 15,000 crore in 10 years.
The company now has two steel plants in Sahibabad (Uttar Pradesh) and Khopoli (Maharashtra), which together produce over one million tonnes per annum.
It has recently begun making value-added products such as galume (zinc and aluminium coated) and colour coated sheets. The company makes galvanised sheets, coils, and corrugated sheets.
Power plant plans
As part of its total integration of the steel value chain, Bhushan Steel is in the process of setting up a power plant and an advanced hot rolling plant on 1,618 acres at Angul, Orissa, at a cost of 5,200 crore.
It is also in talks with the State Government for the allotment of additional 3,500 acres to enable it to triple the planned capacity of 2.2 million tonnes (mt) in about five years. “The Angul plant has started producing 110 MW, sponge iron and billets. And, production is close to 0.5 million tonnes,” said Mr Nittin Johari, Chief Financial Officer.
A 77-MW power plant that will be used internally as well as to sell electricity has been commissioned. Post-completion of this backward integration project, Bhushan Steel will become an integrated steel company.
The company has also zeroed in on Kharagpur (West Bengal) for another power and steel plant and in talks with the State for allocation of about 4,000 acres.
While the steel unit will have capacity of 2 mt, the power plant will have a capacity of 1,000 MW. This project is expected to warrant an investment of Rs 10,000 crore.
“There has to be a debt/equity mix but we have not yet finalised as it is a little too early now,” Mr Johari said.
With the power plants calling for substantial investment, Bhushan Energy under which the power plants would be coming up, would tap the capital market next year for raising funds, he added.
With expansion plans in place, the company is scouting for mining opportunities abroad, more specifically in Australia and Mozambique.
It has recently tied up with Bowen Energy Ltd of Australia for supply of coal to the Orissa plant, by picking up a 15 per cent stake.
For the 2006-07 fiscal, the company reported sales of Rs 3,837.73 crore and net profit of Rs 313 crore. About 35 per cent of its turnover is through exports.