AML Steel eyes units abroad

AML Steel, a Chennai-based steel manufacturer, has set eyes on units based in Central Asia and Eastern Europe as part of its plan for inorganic growth.

"We are in talks with a couple of players and should get a more concrete picture by the first quarter of the FY07," said Ashok Agarwal, managing director.

The company, which had earlier bought and turned around a sick steel unit in Sri Lanka, is open to either acquiring units or taking the management control through equity participation, added Viswanathan P, executive director, finance.

"To raise resources, we are looking at various options including external commercial borrowing or going for foreign currency convertible bonds," said Viswanathan.

However he was tightlipped on further financial details. As part of its organic growth strategy, AML is implementing a three-phase greenfield project to set up a steel plant in Jharkhand with a capacity of two million tonnes per annum.

The Rs 1,944-crore project's first phase, which includes a plant with capacity to produce 1.1 lakh tonne of sponge iron and 42,000 tonne of billets, will be operational by January 2007.

For the project, AML has signed a memorandum of understanding with the Jharkhand government for a 20 year-lease of iron ore mines. Spread over 384 acre, the mine has a reserve of 25 million tonne of iron-ore, said Agarwal.

The company, whose units in Pondicherry and Karaikal produce steel ingots, TMT bars and iron rods, is also setting up rolling mills at these plants.