Ispat Industries has decided to scale up its production capacity in Dolvi in Maharashtra to 5 million tonne a year with an investment of Rs 5,000 crore (Rs 50 billion). The company will sign a memorandum of understanding with the Maharashtra government in this regard this week.
Sources close to Mantralaya, the state headquarters, said the steel company's plan included expansion of capacity and setting up a captive power plant of over 100 mw.
It would also ramp up the port facility for easier access to shipments.
Ispat Industries, the Pramod and Vinod Mittal-controlled steel company, has so far invested Rs 10,000 crore (Rs 100 billion) in the 3.6 mt Dolvi plant. It also has a sponge iron facility in Kalmeshwar in the state.
The total investment will take place in a couple of years. In the next phase, it will ramp up the capacity to 10 mt, sources said. Ispat Industries officials were not available for comments.
Industry sources said Ispat would be eligible for incentives announced by the Maharashtra government in its recent industrial policy.
The concessions may include exemption from octroi duty and incentives for developing infrastructure, such as roads, as the total cost of the project exceeds the mandatory limit of Rs 500 crore (Rs 5 billion).
Ispat Industries is in the process of tying up its raw material linkages and, as a step in the direction, is planning to set up a 3 mt pellet plant in Vizag, likely to cost around Rs 900 crore (Rs 9 billion).
The Ispat group operates and manages about 14 mt of steel-making capacity in various parts of the world, including 3.5 mt of Ispat Industries in the country.
The group operates and manages steel-making and processing capacities through ownership, long-term concessions or commercial contracts in Bulgaria (2.2 mt), Nigeria (Delta Steel and Ajaokuta Steel Company 4 mt combined), Libya (1.8 mt), The Philippines (3 mt) and India (3.5 mt).
