Leading stainless steel producer Jindal Stainless Ltd (JSL) will pump in Rs 7.7 billion via a special purpose vehicle (SPV), to develop external as well as socio-economic infrastructure on a downstream steel park in Kalinganagar, where it is the anchor investor.
The park is billed to draw investments worth Rs 7.2 billion from 90 downstream units. The number of units will be in addition to the one installed by the anchor investor.
While building trunk infrastructure such as roads will entail Rs 1.7 billion in investments, the rest will be devoted to creating social infrastructure, including accommodation for the employees.
“The park will be adjacent to our facility, sprawling on about 300 acres of land. We are awaiting the allotment of land by the state authorities,” said a JSL official.
The park promises creation of direct jobs for 8,000 people. Besides, 10,000 others are projected to be indirect beneficiaries of the employment spin off.
Development of downstream parks in metals sector augurs well for the state government as it prepares for its second showpiece investment summit, 'Make in Odisha' from November 11 to 15 this year.
Ancillary and downstream industries in metals such as steel and aluminium are listed as one of the six focus sectors by the state government in its Industrial Policy Resolution (IPR), 2015.
Despite accounting for around 20 per cent of the country’s crude steel output and leading others in stainless steel production, there is scarcely any downstream steel activity in the state. Odisha is home to leading steel makers like Tata Steel, Jindal Steel & Power Ltd (JSPL), Bhushan Steel and Jindal Stainless, to name a few manufacturers. Downstream steel parks are expected to provide impetus to value addition and boost steel consumption in the state. Although Odisha produces nearly 22 million tonnes of steel each year, hardly 10 per cent is consumed within the state due to lack of demand.
Opportunities for downstream and ancillary industry in Odisha exist in areas like equipment manufacturing, foundries, flat and cold rolled products, fabrication, machining and precision equipment, appliances & white goods, auto components, fasteners and kitchenware.
A report by leading consultancy KPMG has pegged the investment at Rs 12 billion on infrastructure development to develop a full-fledged ecosystem for downstream steel industries. It has suggested establishment of six downstream steel parks at Jharsuguda, Rourkela, Barbil, Paradip, Sambalpur and Dhenkanal for greater value addition of steel within the state with supplies of molten material from the mother plants. Each downstream park has the potential to create employment for approximately 5,000 people.