RINL plans to set up SEZ by 2008 after Rs 9,000 crore expansion

Kolkata, Nov 13 (UNI) Public sector Rastriya Ispat Nigam Limited (RINL), which has embarked on a Rs 9,000 crore expansion programme to double the production capacity to 6.8 million tonnes by 2008, has now decided to set up a Special Economic Zone (SEZ) at Visakhapatnam for the sale of its own product ranges.

This was announced by RINL Chairman-cum-Managing Director Y Siva Sagar Rao while speaking to newsmen here today on the sidelines of an interactive session with members of the Merchants Chamber of Commerce (MCC) on the future of the Indian Steel Industry.

Referring to his plan for setting up the SEZ simultaneously with the huge expansion programme, Mr Rao said though the RINL Board was yet to ratify the decision, he had already applied to the Andhra Pradesh government for allocation of 2500 acres of land near its Vizag plant for the project. "We are very optimistic about receiving the necessary land for the SEZ," he stressed.

Asked about the rationale behind having an exclusive SEZ near the existing plant, the RINL chief said since the expansion programme will also lead to the launch of several new seamless products like automobile components and others, RINL planned to sale these products through the SEZ primarily to the overseas markets and thereby getting a competitve edge over other major Indian steel producers.

He said RINL was now looking for a joint venture partner for the successful and timely completion of the project and for this they were also planning to appoint a renowned consultant soon.

Mr Rao, however, refused to make any comment on the probable size of investment for the SEZ programme saying "It is too early to decide on this".

Referring to his expansion plan and the future of Indian steel industry during the next two decades, the RINL CMD said in order to increase the annual production capacity to 6.8 million tonnes from the present around 3.25 million tonnes after recording over 120 pwer cent growth in last two years, they had chalked up an elaborate expansion cum modernisation programme which was likely to be completed by December 2008 or latest by the end of the first quarter of 2009.

"As part of the expansion programe we are also planning to put up another plant near the existing facility at Vizag and is planning to spend at least Rs 900 crores during the current year itself", he said.

He, however, categorilcaly ruled out any plan to expand the capacity of RINL in Eastern India particularly in West Bengal, primarily because of sourcing any raw materials. But regarding Orissa he was a little more optimistic "simply because the state has a huge reserve of iron ore".

Asked whether he had any plan to go public with a view to raising a portion of Rs 9,000 crore for the expansion purposes, Mr Rao without being specific on the issue said they had already applied to the government in this regard and was planning for releasing a preferential share to the tune of Rs 2,900 crore.

Incidentally the RINL, which has recorded a net profit of about Rs 1,700 crore last fiscal, had been able to wipe out its entire accumulated losses of Rs 4,000 odd crores.

Earlier addressing the MCC members, Mr Rao reiterated that though the Indian steel sector was poised for a bright future till 2025,the Centre must impose a total ban on the export of iron ore to ensure smooth and cheaper availability of raw material for the Indian steel manufacturers.

Citing the example of China which had only been importing iron ore from overseas keeping its own huge reserve intact for future use, Mr Rao urged the Centre to adopt a similar policy for the benefit of posterity.

In this connection he also suggested major amendments in the present Mineral policy enabling the Centre to make it more beneficiary for the small domestic iron and steel producers.

Earlier welcoming the RINL Chairman in the Chamber, MCC President Santosh Saraf highlighted a number of problems being faced by the Eartern India distributors of the Nigam and sought their redressal for the evenly growth of the industry.

UNI ABA TJP RN1528