“We would seriously be evaluating options in Karnataka (where Vedanta has) iron-ore mines. We have a big piece of land already with us, close to our mines (in Karnataka),” he said. The second phase, which includes the Karnataka plant, is in the drawing board stage and may entail an additional investment of about Rs 7,000 crore.
Vedanta, as part of its forward integration strategy, acquired the bankrupt Electrosteel Steels in 2018. Recently, the National Company Law Tribunal approved the merger of the company with Vedanta Star Limited.
The company has finalised two plans for now. The first is debottlenecking existing assets and the second is to look into growth projects.
It has hired consultants for this, Malhan said. On a short term basis, the projects will expand to 3 million tonne capacity and it will take around 18-24 months to get that number, he added.
“Besides optimising existing assets through debottle necking strategies, the company is planning to add another 25-30% of new capacities by the next financial year,” said Malhan.
In Vedanta’s latest quarterly results Electrosteel production was registered at 317 kt, up 18% and sales were up 12% while margins were $55 per tonne, stock exchange filings said. “We were no. 3 in the country in terms of our margins, just behind Tata Steel and JSW Steel. Margins were in the range of 22%. We want to stand strong in the difficult time of economy,” he said.
On the recent Odisha mining auctions, Malhan said the company did not plan to be a part of what happened, though they took part in all the auctions. “We were there for the entire 19 mines which came up for auction.
We did our homework well. It didn’t make sense from our business perspective,” he said. “We are not a big hammer in steel but we working to be a sharp nail,” he added.
In Bokaro, where Electrosteel Steels is located, the company is also planning a capital expenditure of Rs 500 crore for debottlenecking which will add to the current capacity by 25% to 30%.
In January 2020, it acquired a stressed steel company Ferro Alloy Corporation (FACOR) according to an order of NCLT Cuttack. Vedanta is looking to double FACOR’s capacity for a capex of Rs 100-250 crore. “We are very keen to expand FACOR. In the short term, it’s definitely doubling the capacity to 150,000 tonnes,” said Malhan.
Vedanta group spends around a billion dollars on logistics including ocean, rail and road freight, he said. Malhan mentioned that the group will explore synergies for buying raw materials and for logistics.
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3 Comments on this Story
Valerian Pereira328 days ago
Japanese best steel manufacturers:
are needed now for the Indian Growth story:
Especially now the Huge and mega infrastructure has commenced like:
Pre-engineered/prefab High rise towers like SEARS TOwers in Chicago.
2/Steel bridges like in San Francisco.
we need high quality STEEL.
Anil Kumar336 days ago
Valerian Pereira336 days ago
GOA and Bellary: will be declared Steel cities::
with Steel complex and all downstream industries springing/.
Generating economy: generating revenue..generating employment.
All Downstream retail products like Needles/nails/ Cranes: Ladders: Auto/ Steel bridges: pre-engineered Building.
Industrial warehouse of steel.
Overhead bridges: Machines: Rails: Ships: Defense projects all use Varitie of metals..
so, demand is high.
but importantly start the best..clean metal ..steel like the Japanese manufacturer.
NO COMPROMISE in the quality
we need latest technology.