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Vizag Steel gets into expansion mode

Special Correspondent

The Rs. 8,692 cr. programme will be completed by 2007-08

VISAKHAPATNAM: The Rs. 8,692 crore expansion plan of Visakhapatnam Steel Plant (VSP), which has received the Union Cabinet's nod, will be completed by 2007-08, producing 6.30 million tonnes of liquid steel, according to its Chairman and Managing Director, Y. Siva Sagar Rao.

"It is indeed a great moment for the VSP collective, which has been pressing for clearance of this expansion, since 2004-end,'' an exuberant CMD told a media conference here on Saturday.

This expansion would be executed in two phases, the first phase in 36 months from the date of launching the expansion — likely from Deepavali — and the second phase in 48 months, he said.

In the first phase, hot metal production from blast furnaces would be raised from four million tonnes to 6.50 million tonnes; liquid steel from steel melt shop from 3.50 million tonnes to 6.30 million tonnes; wire rods from 1.05 million tonnes to 1.65 million tonnes; seamless pipe mill (new unit) of three lakh tonnes; semi-products from 3.4 lakh tonnes to 3.7 lakh tonnes; and salable steel from 3.34 million tonnes to 5.72 million tonnes.

The second phase would see the special bar mill raising its output from nine lakh tonnes to 1.65 million tonnes in 45 months; and the structurals mill from 1.05 million tonnes to 1.75 million tonnes in 48 months.

Mr. Siva Sagar Rao said VSP would continue to produce long products in the first phase in view of the company's brand image and to meet the envisaged demand for wire rods like medium and high carbon coils, case hardening coils, cold headed quality coils, electrode quality and spring steel coils; seamless pipes, coupling pipes, liner pipes, boiler tubes; and billets. In the second phase, special coils would be produced to meet the demand of the automobile and oil and gas units and structurals such as plain and round re-bars.

External borrowing

Asked how VSP would mop up the resources, Director (Finance), P. K. Bishnoi, said the government had permitted external commercial borrowings to the extent of Rs. 4,300 crore, and the balance would be raised internally.

VSP would utilise natural gas as fuel for the blast furnace, subject to availability, Director (operations), K. K. Rao, said and revealed that a memorandum of understanding had been signed with Gujarat Petroleum for supplying natural gas.

There should be no problem with regard to procuring the needed raw materials, Mr. Siva Sagar Rao said. "We have tied up with National Mineral Development Corporation (NMDC) for steady supply of iron ore, and for coking coal, we have been offered a block in one of the mines in Dhanbad. In addition, we are planning for joint ventures with some U.S. and Australian companies for coking coal.''

The Director (Personnel), K. Ayyappa Naidu, and Chief Vigilance Officer, M. K. Das, were present at the press conference.

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