SAIL’s Bhilai Steel Plant to enhance production capacity

Even while it is consolidating its current round of expansion, SAIL’s Bhilai Steel Plant (BSP) is looking to commence documentation work and undertake feasibility study for the next phase of expansion.

The BSP had recently undergone modernisation and expansion, raising the plant’s production capacity to approximately 7 million tonne (mt) from 4 mt at an estimated investment of around ₹17,000 crore. According to Anirban Dasgupta, Chief Executive Officer, BSP, plans are afoot to enhance the production capacity to 10 mt by 2030. Work on the next phase of expansion is likely to commence by 2024-25.

“For the next three to four years, the focus will be on consolidating the current expansion, but we will start working on the documentation part of the next phase of expansion, which includes undertaking feasibility study, preparing detailed project report etc,” Dasgupta told BusinessLine.

BSP will explore the possibility of roping in a partner to bring in the required investments and for providing technological support. It would offer its prospective partners certain “enablers” such as land bank, raw material linkages, marketing network and its existing workforce. The expanded capacity (10 mt) is likely to come into force by 2030 by which time the country’s demand would have grown and there would be a market to absorb the additional capacity, he said. The plant is the producer and supplier of rails for Indian Railways, including 260-metre long rails. It also produces large variety of wide and heavy steel plates, structural steel and specialises in products such as wire rods and merchant products. For the financial year-ended March 31, 2019, BSP contributed to nearly 25 per cent of SAIL’s total turnover of ₹66,967 crore. The segment revenue had grown by around 3 per cent to ₹17,018 crore for the year-ended March 2019 compared with ₹16,497 crore the same period last year.

According to SAIL’s latest annual report, BSP has planned a capex of around ₹4,000 crore for FY20.

Consolidation

BSP is in the process of phasing out some of its older technologies which used twin hearth furnaces, ingot casting blooming mills since those involved higher cost of production and higher energy consumption.

“There are old facilities in the country which are not energy-efficient and environment-friendly, so we need to phase out those and replace them with newer technologies which are doing better in terms of techno-economic parameters, energy parameters and environment friendliness,” Dasgupta said.

The EBITA-to-turnover ratio, which is 14-15 per cent, should improve to close at 24 per cent once the complete benefits of modernisation and expansion starts kicking in.