Rashtriya Ispat Nigam Ltd (RINL) has finalized an equipment procurement and construction contract with a consortium led by Danieli and C. Officine Meccaniche SpA of Italy as part of the public sector company’s efforts to transform itself into a 6.8 million tonne company by 2010.
A formal deal will be signed next week.
The Italian company will supply engineering and plant technology for three continuous casting machines, which convert liquid metal into rectangular solids, in a contract valued at about Rs1,000 crore, according to Abhixit Singh, a lawyer who represented Danieli.
The other consortium partners are Danieli Engineering India Ltd, a 100% subsidiary of Danieli, which will manufacture equipment parts through vendors, and GIS Ltd, which will build the plant.
“There have been occasions when plans were announced for the steel industry but nothing had happened. It was like a train sitting at a railway station that never left. But now, the train is accelerating ahead,” said John Parker, vice-president of Danieli.
The expansion is part of the government’s ramp-up programme for its steel companies at an investment of nearly Rs50,000 crore to meet India’s growing demand for steel; nearly Rs40,000 crore will be invested by the Steel Authority of India Ltd.
RINL plans to invest Rs8,700 crore.
The expansion will be done in two phases: About Rs7,000 crore will be spent to build a 600,000-tonne wire-rod mill for the automobile sector and a 300,000-tonne seamless-tube mill, among others.
The company has also signed contracts with Paul Wurth India Ltd, Larsen and Toubro, TPE of Russia, McNally Bharat Engineering Co. Ltd and Germany’s SMS Demag AG.
A 750,000-tonne special bar mill and a 700,000-tonne structural mill will be set up in the second phase.
“After our expansion is complete, 44% of our capacity will be in the high-value segment,” said Harminder Singh Chatwal, director of commercial projects at Rashtriya Ispat.