Steel plant equipment makers, global tech providers set to sign $5 billion deals

NEW DELHI: A number of Indian and international steel plant equipment makers and technology providers, including BHEL, HEC, Primetals Technologies, Nippon Steel and Paul Wurth, are set to sign deals in Bhubaneswar next week to manufacture machinery domestically.

Steelmakers such as Tata Steel and Jindal Steel & Power Ltd are also expected to sign tripartite agreements with Indian and global capital goods firms for assured offtake at a conference being organised by the steel ministry on October 23 to facilitate talks between foreign suppliers with Indian manufacturers to float joint ventures in India, steel minister Choudhury Birender Singh said on Thursday.

Singh said 20 memoranda of understanding (MoUs) are likely to be signed between Indian equipment makers and foreign technology suppliers to set up or expand local manufacturing base at estimated investments of $5 billion over the next 10-12 years.


The ministry will also consider fiscal and non-fiscal incentives to promote local equipment manufacturing for steel plants.

Several steel technology multinationals, including Paul Wurth, Danieli Corus, SMS, CEC, Metso, Saralle, Acre and Kawasaki from eight countries — Luxembourg, Spain, Italy, Germany, the Netherlands, Finland, China and Japan — are expected to sign MoUs with Indian firms. In all, 12 countries are being represented at the conference, said an official press statement.

ET was the first to report on September 27 that global steel plant equipment makers including Primetals Technologies, Nippon Steel, Paul Wurth, Danieli Corus and Thyssenkrupp are expected to hold negotiations in October with domestic firms like Bharat Heavy Electricals (BHEL), HEC, Jindal Steel & Power and Larsen & Toubro to set up manufacturing facilities in India.

The move is aimed at enhancing domestic capacity in capital goods manufacturing for the steel sector and promote the Make in India initiative. The ministry will also assist talks between the capital goods firms and steel firms to ensure adequate order flows to the proposed joint ventures, Singh said.

The estimated import of plant and equipment for reaching 300 million tonnes steel capacity is around $25 billion. Further, for meeting the spares requirement, it is estimated that the country will have to spend about $500 million annually for import of proprietary and other spares.

The National Steel Policy 2017 envisages creation of 300 million tonnes of steel capacity in the country by 2030-31 at an investment of up to $128 billion in primary and secondary steel sectors. The expected capacity creation in the steel sector would involve at least 15-20% investment in plant and machinery.

India accounts for about 6% of the global steel production and is set to become the second largest producer of steel in the world. In 2017-18, the country produced 102.19 million tonnes of crude steel, clocking a growth rate of 4.3%.