ISMT sets up a steel plant in Australia

Mumbai, Mar 22 (UNI) Specialty steel and seamless tubes major ISMT is setting up a 4,00,000 tonnes per annum (tpa) steel plant in Australia in partnership with Boulder Steel of Australia and Vrittenfield, an Austrian steel company.

ISMT CEO today said B R Taneja the total investment in the project has been pegged at USD 300 million with ISMT holding a minimum of 35 per cent stake in the JV.

''This will be a very cost-effective operation as the power and gas costs in Australia are very low,'' he said.

Domestically too, ISMT is on the move with plans to expand the capacity of its specialised seamless tubes at its Baramati plant from the existing 1,55,000 tpa to 4,75,000 tpa at an outlay of Rs 250 crore.

Similarly, the company's alloy steel capacity will be upped from the present capacity of 2,50,000 tpa to 5,00,000 tpa at its plant at Jejuri.

''While the tubes capacity expansion will be completed by February 2008, the alloy steel capacity will be augmented over the next two-to-three years,'' said Mr Taneja, adding that funds generated entirely through internal accruals will be used for the purpose.

ISMT will also install a new finishing mill at Baramati in Tandem with the existing mill.

''The capacity of the new mill will be 4,05,000 tpa and at 80 per cent utilisation, the mill will produce 3,25,000 tpa,'' Mr Taneja revealed, adding that the mill will not only enhance the productivity of the plant and reduce raw material cost through yield improvement but that it will also reduce the processing cost by as much as ten per cent.

With the plan to transform ISMT into one of the world's largest players in the specialised tube segment in place, the company is also on track to catapult its turnover from its projected turnover of Rs 1,086 crore in FY 06 to Rs 2,900 crore post-expansion, with exports contributing between 25-to-30 per cent to total revenues, Mr Taneja added.

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