Shyam Group to Commission First Phase of Steel and Power Plant in West Bengal by 2009
The first phase of an integrated steel and captive power plant to be set up by the Shyam Group (Kolkata, West Bengal) is expected to be operational by the end of 2009, reports Industrial Info Resources (Sugar Land, TX). The greenfield project by Shyam SEL and Power Limited (Kolkata), a flagship company of the Shyam Group, will be located in Jamuria in the Burdwan district of West Bengal. The Shyam Group signed a memorandum of understanding in February with West Bengal Mineral Development and Trading Corporation and West Bengal Industrial Development Corporation to start work on the project. The first phase will consist of a steel plant with capacity of 250,000 tons per year and a captive power plant with a generation capacity of 250 megawatts (MW). Phase I is expected to cost $413 million with a 65:35 debt-equity ratio. A coal block in Jagannathpur has been allocated for the power plant.
West Bengal's government has also assured the Shyam Group that another block located in Kunnur will also be assigned soon. Damodar Valley Corporation (Kolkata) will provide electricity to the project, and an agreement has been signed with the government's Irrigation and Waterways Department for water supply. Shyam SEL plans to purchase iron ore for the steel plant from mining companies in the nearby mineral-rich state of Orissa. It is estimated that 3 million tons of coal and 900,000 tons of iron ore will be required to run Phase I of the integrated plant. Civil construction has begun, and 80 percent of the equipment and machinery for the plant has already been ordered. Environmental clearances have also been obtained from the Ministry of Environment and Forests.
Once fully commissioned and operational, the project will have the capacity to manufacture 1.1 million tons per year of steel and generate 1,000 MW of power. Shyam SEL will require 606 hectares of land for the project. West Bengal's government will provide 73 hectares. The company has presently acquired around 162 acres.
In addition to conventional steel, the plant will also produce auto steel, special steel, ductile iron pipes, carbon special alloys and steel used to build power transmission structures. The steel and power plant is expected to provide employment opportunities to more than 8,500 people. The company is also planning to develop a port facility in Puri, Orissa, with a storage capacity of 12 million tons. The port, estimated to cost from $372 million to $413 million, will be a joint venture with Century Plyboards (Kolkata). Established in 1991, the Shyam Group has business interests that include iron and steel, cement, industrial oxygen, ferroalloys, rolling mills and power. The company has a strong domestic client base but also exports to Germany, the United Kingdom, Korea, China, Nepal and the United States.
West Bengal is attracting the attention of companies and large business houses, especially in the steel and power sector. More than $14.4 billion is expected to be invested in the state. Some of the key investors are Videocon Industries Limited (Aurangabad, India), Bhushan Steel Limited (New Delhi), Jai Balaji Industries Limited (Kolkata) and JSW Bengal Steel Limited (Kolkata). More than 108 proposals are under consideration to set up small and midsize steel manufacturing units. But industry experts indicate that many of these investments may be delayed because of the economic slowdown.
