NEW DELHI: Steel seems to have outplayed other sectors in wooing investments, both foreign and domestic, as the sector is set to attract investment worth about Rs 3,00,000 crore within the next five years.
“Our steel sector is booming and has emerged as a key investment destination for multinational steel giants like Mittal Steel and Posco. The investment promised by these companies alone total to more than Rs 1,30,000 crore with others making a beeline to invest here,” a top steel ministry official told agencies.
“Going by the ballpark estimate of Rs 4,000 crore investment per million tonne of additional capacity, an investment of Rs 2,76,880 crore is expected by 2011-12 and Rs 8,70,640 crore by 2019-20,” he pointed out.
The optimism of steel ministry could be understood as consumption of steel during the last three years has grown by 12.5% per annum against 6.9% envisaged in the national steel policy.
Enthused by the government’s investment policies, Korean steel giant Pohang Steel Company (Posco) arrived in India in 2005 and pledged to invest Rs 52,000 crore to build a 12 million tonne integrated steel plant in Orissa. Not to be left behind, global steel tycoon LN Mittal too have promised to invest about Rs 80,000 crore for building one plant each in Jharkhand and Orissa.
Sensing stiff competition, state-run steel giant SAIL embarked on modernising all its plants at an estimated cost of Rs 49,000 crore to retain its position as the key domestic player. Besides, the Rashtriya Ispat Nigam (RINL) too is executing its modernisation worth about Rs 9,000 crore.
As per a recent report by an international investment banker, consumption of steel in India is set to grow by 16% per annum during the next five years and 100 million tonne of steel will be consumed by India by 2012, the official pointed out. The country’s raw material availability, coupled with growing consumption, has emboldened domestic steelmakers such as Tata, Essar and JSW to announce major capacity expansions, both greenfield and brownfield.
Tata steel has announced to carry out brownfield expansions in Jamshedpur and greenfield in Chhattisgarh and Orissa to increase its production to 13 MT. JSW too is expanding capacity of its Vijayanagar plant and is setting up greenfield project in West Bengal to take its production up.
Essar steel will up its capacity to 14.5 MT from the current 4.6 MT. Among the greenfield projects pledged by steel utilities are 3 MT by Tata Steel, 6 MT by Essar, 5 MT by BSPL, 1 MT by Monnet Ispat. Even states which do not have iron ore too have attracted huge investments. Gujarat has roped in investment of about Rs 9,577 crore, Maharashtra Rs 4,665 crore, and West Bengal has clinched investments of more than Rs 30,000 crore.
“While the euphoria on the steel sector is heartening, we are keen to ensure that these promised investments translate on the ground and an inter-ministerial group (IMG) has been constituted to ensure the same by removing the bottlenecks impeding the investments,” the official said. The IMG is meeting on October 30 to deliberate on the impediments and suggest ways to remove them, he said and pointed out that it would extensively deliberate on ways to ensure raw material security to the steelmakers.
Tuesday, October 30, 2007
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