1:1 Debt-Equity Ratio For Jindals Orissa Project

New Delhi, July 30: | Updated: Jul 31 2003, 05:30am hrs
Jindal Stainless Ltds Rs 450-crore proposed stainless steel project at Dubri in Orissa will have a 1:1 debt-equity ratio. The company will invest Rs 225 crore from internal accruals, while an equal amount will be raised as loans, mainly in the form of foreign currency debt.

The companys vice-chairman and managing director Ratan Jindal told FE that the fully integrated project will manufacture ferro chrome by using liquid ferro chrome as a substitute for shredded scrap a technology used by only one or two plants in the world including Autocompo in Finland. We are still in the process of finalising technology for the steel melting shop, while we have placed orders with SMS Demag AG for supply of engineering and major equipment for two electric arc furnaces, he stated.

In the first phase, the project will manufacture 1,60,000 tonne of high carbon ferro chrome at a cost of Rs 150 crore, helping the company become its largest producer in the country. The ferro chrome will be used for captive consumption at its existing plant at Hisar in Haryana.

In the second phase of the project, a downstream facility will be set up after 2007.

The 6-lakh tonne steel melting shop will be set up at an estimated cost of Rs 300 crore. About half of the produce (steel slabs) will be exported to China, while the balance will be consumed at Hisar. Hisar has a cold rolling capacity of 8 lakh tonne, higher than the 5 lakh slab production capacity, which leaves a deficit of 3 lakh tonne which will be fed from the proposed plant.

The project will go on stream by September 2004.

The company is considering a captive power plant of 120 MW at an additional cost of Rs 250-300 crore.

Jindal Stainless has applied to the Orissa government to acquire chrome ore, iron-ore and coal mines on lease, on which a royalty will be payable annually.