Indian Steel Corporation scraps steel SEZ plans in Kutch

AHMEDABAD: Japanese conglomerate Mitsui & Co and its Indian partner Ruchi Group's Indian Steel Corporation Ltd ( ISC) have scrapped their steel SEZ project in Kutch.

Instead of an SEZ, the company is now planning to set up a steel plant to cater to the domestic market, but even this plan is uncertain due to gloomy ecnomic scenario. Mitsui and Ruchi Group have a 20:80 joint venture company called ISC.

Mitsui is a $50-billion company while its Indian partner Ruchi Group's turnover stands at Rs 30,000 crore. "Three years ago, we had applied to the state government to allocate us 1,800-2,000 hectares in Kutch," said Umesh Shahra, managing director, Indian Steel Corporation. In 2010, the joint venture company ISC had planned to set up a steel SEZ project at Tagdi village in Kutch district.

After scraping the SEZ project, the company planned only to set up a steel plant at Kutch. "We have also kept the steel plant project on hold," said Shahra, adding, that the major reason is the economic slowdown which has resulted in the fall of domestic steel consumption to 4%, which used to be 10-12% during 2010.

Global slowdown had lead many companies like Welspun, Essar Steel, Pradip Overseas, Gallops's multi-product SEZ and Strength Real Estate to drop their SEZ projects on account of fall in demand. Recently, in January, Reliance Industries' 40% SEZ in Jamnagar was de-notified in order to cater to the domestic market.

For the time being, the company is planning to focus on developing new products. ISC on Monday launched Ultrashine XL, which the company claims to be an innovative colour-coated profile sheet of 4 ft width, having application in residential, commercial and industrial roofing.

ISC's current turnover is Rs 3,400 crore and it expects to ride on its innovative product range to achieve Rs 5,000 crore turnover by the end of next two years. Currently, the size of Indian steel industry is 80 million tonne, out of which 60% is of flat steel. The company is also looking for more greenfield and brownfield projects, said the managing director of the company.