NEW DELHI: State-run behemoth Steel Authority of India (SAIL) is planning a second coast-based steel plant in Odisha at an estimated cost of over Rs 15,000 crore as part of a larger plan to ramp up capacity from current production of 16.3 million tonnes (MT) to 50 MT in two phases.
“We have received a positive response from Odisha Chief Secretary and will send a team to scout for a plot near the coast. We have been planning a coast-based steel plant for some time,” said SAIL chairman Anil Kumar Chaudhary.
SAIL’s Odisha venture comes at a time when Odisha BJP leader Dharmendra Pradhan takes over the steel ministry in NDA’s second term, apart from his earlier charge of petroleum and natural gas.
Chaudhury said the Odisha project, if it comes about, would be SAIL’s second steel plant in the eastern state. The production could initially be for 3 million tonnes, which could be ramped up to 6 million tonnes in time. SAIL currently runs the Rourkela Steel Plant in the state, which was set up in the 1960s with German technical collaboration, and was recently modernised and expanded to a capacity of producing 0.5 MT of hot-rolled metal annually.
“Overall, we plan to raise our capacity to 50 million tonnes by 2030-31 in two phases. The first phase, which will be till 2025-26, will take our capacity to 35 MT,” said the SAIL chairman, who has earlier served the steel giant as its finance director. This year, SAIL produced 16.3 MT of steel and plans to push that up to 17.5 MT this fiscal.
“We plan to make the capacity expansion viable by using a mix of internal accruals and borrowings in the ratio of 50:50,” said Chaudhury. Costly debt during a period of market downturn had seen SAIL posting losses in the past. SAIL managed to bounce back to profits with an impressive Rs 2,178.82 crore profit in FY19, after three years of losses.
Most of the capacity upgradation will come from expansion at SAIL plants at Rourkela, Bokaro, Bhiali, Durgapur and IISCO, said sources.