The Delhi-based Bhushan Steel and Strips, with a turnover of just about Rs 330 crore, is planning to set up a four million tonnes steel plant with a project cost of more than Rs 14,000 crore.
The company has approached the state government seeking its approval for setting up of the plant at Chiplun, Ratnagiri district. The company is yet to finalise its sources to raise the initial fund requirement estimated at around Rs 2000 crore.
Neeraj Singal, managing director, Bhushan Steel and Strips said that plans for raising resources of this nature had not been set in motion by the company. According to Singhal, the project is at its infancy and is dependent on government approvals, only after the approval stage can the project proceed further.
Meanwhile, the companys Rs 4,000-crore steel project in Orissa has also run into rough weather with the Orissa government not showing interest in finalising the rehabilitation package for the acquired 1,800 acres of land. Bhushan Steel and Strips had invested a sum of Rs 10 crore for the project before deciding that it could not proceed with the project.
The investment of Rs 2,000 crore for the Chiplun project was for initially manufacturing five lakh tonnes of steel annually with the balance investments to be made in tranches during the next five-nine years starting from the first stages of production.
Meanwhile, the company has sought all concessions from the Maharashtra government which normally accrue to mega projects.
While MIDC is already in the process of acquiring land in the Ratnagiri area for development into an industrial area, Bhushan Steel and Strips has in a written request to the government of Maharashtra asked that this land be allotted to it so that, proper construction, commissioning and production programme could be worked out.
The company is also seeking a written assurance from the government of Maharashtra for land allotment to enable it to, award consultancy to the project consultants for starting the preliminary site work.
While it appears to be pursuing its mega project with zeal, its on-going expansion plans are running behind schedule. Its Sahidabad plant which was slated to increase its capacity from 1.2 MT of cold rolled steel strips to 5 MT by December 1996 is behind schedule.
According to Nitin Johri, general manager, finance, Bhushan Steel and Strips, the first phase of this expansion would be complete only by April 1997 with the second phase of expansion expected to be completed by April 1998. The total scale of expansions at this plant has been down-sized from the earlier Rs 650 crore to Rs 625 crore.
The Bhushan group which comprises Bhushan Steel and Strips, Bhushan Metallics and Bhushan Industries had chalked out collective expansion plans worth Rs 810 crore and the group had expected to register a turnover of Rs 1,500 crore by March 1998.
However, the group has now scaled down its previous expectations. According to Johri, the group turnover figure would be lower and is expected to be around Rs 1,200 crore by March 1997.
Its other requirements for its Rs 14,000-crore steel plant in Maharashtra are permission for the construction of a jetty for captive use and sanction of 100 mw power in phases by the government of Maharashtra.
It has also sought land for its proposed corporate office in the Bandra-Kurla complex of around two lakh square feet and land for its proposed residential apartments for its senior executives approximating five lakh square feet at Navi Mumbai.
