Public sector giants SAIL, BHEL and RINL have decided on a joint venture for building an integrated manufacturing unit for electrical and silicon grade steel. Value-added special products used in heavy electrical equipment and in the infrastructure sector will also be made. This is a first such in the country.The three already formed a joint technical committee, which in turn has had several rounds of informal discussion with owners of the well-guarded technology.

Sources in SAIL, BHEL and RINL confirmed to Business Line that the three Government-owned entities recently decided to seek expression of interest (EOI) from the owners of the technology in the next two months.

The proposed production facility will be in collaboration with a proven technology owner. The initial production capacity of two grades of silicon steel – CRGO and CRNO – at the proposed facility has also been suggested at 1.5 lakh tonnes an annum (ltpa) and two to three ltpa, respectively. The shortlist of locations for the project includes Rourkela, Bokaro, Salem and Visakhapatnam.

The initial investment could be around Rs 3,000 crore, sources said.

A top official, who is on the committee, said globally there were a few owners of this technology, mostly some major global steel makers, and not the international equipment vendors.

“Though a general unwillingness to share or transfer the technology is common among the technology owners, some have expressed interest during the interactions. Informal talks so far showed that a structured and formal move is likely to elicit better response. The EOI will be the first step in that direction,” another official involved in the exercise said.

“The preparation is on now for formation of a joint venture between the two steel makers – SAIL and RINL – and BHEL, the largest domestic consumer of electrical grade steel. The joint venture is expected to invite global EOI within a couple of months for procuring the technology,” a board member of one of the three partners said.

Apart from formalisation of joint venture through an agreement and invitation of EOI, broad contours of investment plan in the proposed manufacturing project, equity participation in the joint venture by the three partners, the location of the plant are also likely to be drawn up by August, sources observed.

Earlier, SAIL had talks with Posco and Nippon on the possible collaboration for production of electrical steel technologies. But, sources said, the negotiations stopped short of resulting in a deal. The joint team, however, is understood to have found encouraging informal responses from certain European and the US silicon steel technology owners.

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