Press Trust of India / New Delhi Feb 05, 2012, 10:06 IST
Bhushan Steel has put its proposed Rs 20,000 crore steel plant in West Bengal on hold, stonewalled by the Mamata Banerjee government's policy of not acquiring land for industry, a senior company official said.
"Land acquisition in the state is an uphill task for the industries, we can not do it alone. It is difficult for us to acquire such a vast area on our own," company Director (Finance) Nittin Johari told PTI.
He added, "It (the project) is on hold, nothing is moving there. We can not make any commitment on capital expenditure until the land is acquired fully."
Bhushan Steel had proposed to set up a 6 million tonnes per annum (MTPA) steel plant in the Asansol industrial area, for which it required about 2,500 acres of land. It was envisaged to to have 3-MTPA capacity in the first phase and was to be operational by 2015.
However, the company's plans were affected by the state government's decision to not acquire land for industry when the Mamata Banerjee-led government assumed office in May, 2011.
The West Bengal Chief Minister has been known for her stance against forcible land acquisition and the decision was taken in that backdrop.
"We have not yet to decided to scrap the project as of now. We are still trying to acquire land in small patches, but entire acquisition will take time. Let's see what happens," Johari said, adding that any further decision would take about 6-7 months' time.
By October, the company also expects to get a clear signal from Sumitomo Metals, as by then the process of merger of the Japanese firm with Nippon Steel is expected to be completed. Both Bhushan and Sumitomo were earlier exploring the possibility of a joint venture for the proposed steel plant.
Bhushan currently has a production capacity of 2.5 MTPA and it produces secondary steel products like cold-rolled coils, galvanised coils, colour-coated coils, etc, from its three manufacturing facilities in Uttar Pradesh, Maharashtra and Odisha.
On January 28, the company's board approved raising up to Rs 700 crore by April through a rights issue to part-finance its ongoing expansion projects.
The company intends to use the money to part-finance its expansion activities, particularly in Odisha, where it is setting up a new 3 million tonnes per annum plant. The plant is scheduled to be operational by September this year.
It also intends to retire part of its Rs 13,000 crore debt through the fund raising. In the quarter ended December 31, 2011, Bhushan Steel registered a marginal 1.33 per cent decline in net profit to Rs 276.62 crore.
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