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| SAIL to invest $12 bn in four overseas plants |
| Press Trust Of India / New Delhi Feb 22, 2011, 00:30 IST |
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Steel Authority of India (SAIL) on Monday said it was planning four three-mtpa manufacturing facilities, one each in Indonesia, Mongolia, South Africa and Oman, at a cumulative investment of $12 billion.
“We have already signed the memorandum of understanding with the Indonesian government and are in constant dialogue with the governments in Mongolia, South Africa and Oman for setting up the three-mtpa steel plant,” SAIL Chairman C S Verma told reporters on the sidelines of an ICC-organised conference.
“We are aiming to finalise all the plants in 2011-12. If all four plants are finalised, then the investment required would be at least $12 billion — $3 billion in each,” he said.
The proposed investments are likely to be financed in a 80:20 debt-equity ratio and the state-owned firm might rope in a strategic investor to part-finance the equity part.
The SAIL chairman said it would take three years for a plant to go onstream from the day of signing a definitive agreement. The plants would basically cater to the domestic requirement of steel in each country.
SAIL will set up the facilities only if the local governments ensure that the requisite raw material and land is made available to the proposed plants.
Apart from expanding its operations beyond the country’s borders, SAIL intends to solicit the allocation of raw material assets in these countries in lieu of setting up the plants. It will use these assets to meet the demand of the proposed plants, as well as existing and future projects in India.
The Maharatna company has already embarked on a Rs 70,000-crore capacity expansion plan to enhance its domestic production capacity from the current from 14.35 mtpa to 23.46 mtpa by 2012-13.
Out of the total capex, Rs 10,000 crore has been earmarked for the development of mines. SAIL also plans to enhance its steel-making capacity to 60 mtpa by 2020.
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