Neelachal Ispat in talks with foreign firms for 800,000-tonne wire rod mill

The unit, to come up inside the company's steel plant at Kalinganagar, will produce rebars, rounds and wires with wire rods of two variants of 6-22 mm and 12-18 mm

Neelachal Ispat Nigam Ltd (NINL), a state-run steel company jointly promoted by MMTC Ltd and two Odisha government entities, has initiated talks with companies of international repute to build a bar and wire rod mill inside the premises of its steel facility at Kalinganagar (Odisha).

The plant is tipped to have an annual capacity of 800,000 tonnes. The proposed mill will produce rebars, rounds and wires with wire rods of two variants of 6-22 mm and 12-18 mm.

NINL had recently floated an Expression of Interest (EoI) for conversion of billets into TMT rebars. The objective was to identify potential steel-processing units who would be interested in conversion of NINL's cast billets into TMT rebars as a conversion agent. Depending on the proposals received from intending agencies, NINL would enter into contracts with them for the planned conversion.

The conversion agent will be tasked with lifting NINL billets from its steel plant premises and transport it to the site of conversion. The onus will be on the agent for unloading, handling, stacking and storage of billets and taking up conversion into finished products in keeping with NINL's requirement. The finished products would then be stacked at a protected place at the conversion agent's works.

Tentatively, NINL proposes to convert 150,000 tonnes of billets each year. The conversion agent will be awarded the contract for a span not less than two years with the clause for extending it by one year on mutually agreed terms. To be eligible, the conversion agent needs to have at least three years of experience and be endowed with a valid licence for production.

NINL operates a 1.1-million-tonne-per-annum integrated steel plant at Kalinganagar. The public-sector steel company known to be the biggest producer-cum-exporter of pig iron resumed billet production in December 2018, months after it was through with its blast furnace overhaul. After the successful completion of its blast furnace repair work in April, NINL has set higher production targets for hot metal and pig iron.

NINL, after a successful blast furnace capital repair running into over four months, clocked an operating profit during the April-August period of this fiscal. The steel maker turned Ebitda (earnings before interest, taxes, depreciation and amortisation) positive, recovering dramatically from its Ebitda-negative status in FY18. With growth in production, rolling out of value-added products — steel billets, conversion of a part of billets into TMT, wire rods and mining from its captive iron ore asset, the company aims to turn in a net profit next fiscal.