Xinxing to set up steel plant in K'taka

Chinese company Xinxing Group has formed a partnership with Indian investors Manasara Investments, Kelchandra Group and another global company Sigma Minmet Ltd, to set up a 6 million tonne iron ore pellet plant in Karnataka for an estimated investment of Rs 8,735 crore.

The newly-formed company "" Xindia Steels Ltd "" will set up an iron ore pellet plant (2 million tonne) in Koppal district in North Karnataka in the first phase. A steel plant of a 2.5 million tonne capacity will be set up in the second phase which will also see the capacity of the pellet plant reaching 6 million tonne.

While Xinxing Group and Sigma Minmet Ltd hold a combined 55 per cent stake in Xindia Steels, the balance is held by the Indian promoters. "This investment is in line with our strategy to be an active contributor to the emerging Indian steel industry. Xinxing has the products and the capability to produce them locally for the Indian market," said Xinxing Group Chairman Liu Mingzhong.

The Xinxing Group, a $11 billion conglomerate and listed on the Shanghai Stock Exchange, has multi-locational factories manufacturing ductile iron pipes, steel plant and equipment, shoes, apparels and cement. It produces over 2 million tonnes of ductile iron pipes too.

The Koppal project also plans to produce 250,000 tonnes of iron pipes.

Xindia Steels Ltd Vice Chairman Alex Huang, said: "There is a demand for the production of steel globally and in India. As per the National Steel Policy (2005), the projected demand is about 200 million tonnes by 2020. We see a tremendous growth opportunity."

According to Xinidia Steel Director Gopi Ramanathan, the project is expected to provide employment to over 16,000 people in the local community both directly and indirectly over the first and the second phases.

"The first phase of the investment will meet the needs of the steel and sponge iron plants. The second phase of investments will bring in Xinxing's steel technologies. Instead of exporting raw materials (iron ore), Xindia will export finished products," he added.