Steel Authority of India said on Monday that it plans to put up four 3 mtpa manufacturing facilities —— one each in Indonesia, Mongolia, South Africa and Oman —— at a cumulative investment of $ 12 billion.
“We have already signed the Memorandum of Understanding with the Indonesian government and are in constant dialogue with the governments in Mongolia, South Africa and Oman for setting up the 3 mtpa steel plant,” SAIL Chairman, Mr C S Verma, told reporters on the sidelines of an ICC organised conference here.
“We are aiming to finalise all the plants in 2011—12. If all four plants are finalised, then the investment required would be at least $ 12 billion - $ 3 billion in each of them,” he said.
The proposed investments are likely to be financed in a 80:20 debt equity ratio and the state owned firm might rope in strategic investor to part finance the equity part.
The SAIL Chairman said it would take three years for a plant to go on stream from the day of signing a definitive agreement. The plants would basically cater to the domestic requirement of steel in each respective country.
SAIL, however, will set up the facilities only if the local governments ensure that the requisite raw material and land is made available to the proposed plants. The sooner the identified countries can arrange and ensure the prerequisites, the faster and easier it would be for the Maharatna firm to start working on these projects.
Apart from expanding its operations beyond the country’s borders, SAIL intends to solicit allocation of raw material assets in these countries in lieu of setting up the plants. It will use these assets to meet the demand of the proposed plants, as well as existing and future projects back home in India.
The Maharatna company has already embarked on a Rs 70,000 crore capacity expansion plan to enhance its domestic production capacity to 23.46 mtpa by 2012—13 from 14.35 mtpa at present. Out of the total capex, Rs 10,000 crore has been earmarked for mines development.
SAIL has plans to increase its steel making capacity further to 60 mtpa by 2020.