SAIL clears expansion of Salem Steel Plant

NEW DELHI: The Board of Directors of Steel Authority of India Ltd (SAIL) on Wednesday approved a proposal for expansion of Salem Steel Plant (SSP) in Tamil Nadu at an indicative cost of Rs. 1,553 crore.

The plan envisages installation of steel-making facilities, including a continuous slab caster, and expansion of the plant's cold rolling capacity. The capacity addition, to be completed within 36 months, will enable SSP to take advantage of the growing global stainless steel market.

At present, it does not have steel-making facilities and is entirely dependent on external sources for supply of stainless steel slabs. This has been one of the main factors affecting its sustained profitability.

The new steel-making facility, with the capacity to produce 1,80,000 tonnes of stainless steel slabs per annum, will create input security for SSP and position it to become cost-competitive. It will include a 50-tonne electric arc furnace, 60-tonne AOD converter with ladle furnace and single-strand slab caster.

Also, the expansion of SSP's cold rolling mill is expected to help improve the plant's market share in the value-added growth segment of the stainless steel market. SSP's cold rolling capacity will go up from 65,000 tonnes to 146,000 tonnes per annum with the addition of an annealing and pickling line among other facilities as part of the expansion plan. Extra grinding machine

SSP's expansion plan also has the provision for installation of an additional grinding machine in its hot rolling mill that produces 1,80,000 tonnes of coils/sheets per annum presently.

SAIL's Corporate Plan 2012 envisages dedicated supply of 190,000 tonnes of stainless steel slabs to SSP from Alloy Steels Plant in Durgapur per annum. SSP's hot rolling mill will, therefore, be able to process 3,70,000 tonnes of slabs annually.

In the meantime, SAIL has issued a letter of intent to Jaiprakash Associates Ltd with a view to forming a joint venture for producing 2 million tonnes (MT) of cement per annum. The proposed joint venture, in which SAIL will have 26 per cent equity, is being formed as a part of the company's sustained eco-friendly efforts to explore an alternative mode of slag disposal at its Bhilai Steel Plant.

The joint venture will enable the plant to gainfully utilise the slag generated in the plant's blast furnace. Bhilai currently generates around 1.5 MT of slag per annum, which is disposed through medium-term contracts to cement manufacturers. Under Bhilai's ongoing expansion plan, the annual generation of BF slag is likely to increase to the level of around 2.1 MT, according to a SAIL announcement.