SAIL to Invest in Greenfield Steel Plant in West Bengal

Steel Authority of India Limited (SAIL) is considering an investment of Rs 20,000-24,000 crore to establish a four-million-tonne greenfield steel plant at its IISCO plant in West Bengal. The company aims to produce high-end flat hot rolled coil (HRC), including for automotive applications, at its existing site in Burnpur. In-principle approval for the project has been granted.

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In-Principle Approval Received

Brijendra Pratap Singh, the director-in-charge of the IISCO steel plant, confirmed that they have received in-principle approval for the greenfield plant, which will focus on producing flat HR coils, targeting grades such as API (American Petroleum Institute) and automotive, among others. While board approval is still pending, it is expected to be granted shortly.

Project Details and Timeline

The exact capital expenditure (capex) and investment details will be finalized after the tendering process. After facing delays and discussions about potential foreign partners for a joint venture, SAIL has decided to undertake the flat steel expansion project independently, likely relying on imported technology. The project is anticipated to be completed within the next 3-4 years.

IISCO's Current Performance

Singh provided an update on IISCO's current performance, stating that the plant operates a 2.6 million-tonne crude steel plant and converts 85-90 percent into finished products such as TMT bars, wire rods, and heavy structurals. Despite sluggish market prices, he expects the plant to achieve an ending revenue of Rs 11,500- Rs 12,000 crore for the current fiscal year due to higher production.

SAIL's Planned Investments

Previously, SAIL management had informed investors about a planned Rs 1 lakh-crore investment across its plants for greenfield and brownfield expansions over the next 3-4 years. The company aims to maintain a debt-equity ratio of 1:1. For the current fiscal year 2023-24, SAIL's capex is estimated at Rs 5,500 crore, with Rs 2,100 crore already infused in the first half.

SAIL's proposed investment in a greenfield steel plant in West Bengal signifies the company's commitment to expanding its production capacity and diversifying its product portfolio. The project is expected to contribute to the growth of the steel industry in India and create employment opportunities in the region.