Ispat plans to set up engineering SEZs

NEW DELHI: Ispat Group is planning to set up the first specialised engineering and metallurgical SEZs in the country. The group already has interests in steel, mining, textile and power.

Ispat Industries MD Vinod Mittal told ET: “We are looking at developing a specialised metal-related SEZ in Maharashtra. We see an opportunity in this segment which is used for making various automobile products.” The SEZ will try to attract investments from auto and auto component companies among others.

Though he did not spell out details of the project, it is learnt that the group is looking at developing the SEZ over an area of about 3,000 acres which would be able to absorb investment worth Rs 3,000 crore.

The SEZ will tap into the big opportunity emerging in the automobile industry in the Mumbai-Pune belt. In recent times, many global automobile companies have announced plans of setting up greenfield units or ramping up existing operations.

This has thrown up opportunities for steel companies in terms of increased demand for steel products used for making intermediate products including components.

Ispat is planning this diversification along with a brownfield expansion of its steel
manufacturing business. The estimated investments for the expansion of steel capacity is pegged at Rs 2,500 crore. The company is looking at various options of funding the investment plan.

The brownfield expansion programme would be completed by 2008. This would increase the capacity from the existing 3.6-mn tonnes to 5.4-mn tonnes at the Dolvi plant. Ispat Industries, the flagship company of the group also has a unit at Kalmeshwar where it manufactures cold rolled steel.