Kolkata based MSP Steel and Power an integrated steel producer will complete the first phase of INR 800 crore CAPEX to add 100,000 tonnes of sponge iron and 18 MW power capacity by next month at its Raigarh plant in Chhattisgarh.

In phase-II, which is expected to complete by July next year, the company will add 100,000 tonne of sponge iron, 600,000 tonnes of pellet capacity and 34 MW of power production.

The CAPEX would be funded in a debt, equity ratio of 1:2 besides internal accruals and preference allotment to promoters. It has tied up INR 545 crore term loan through a consortium of banks lead by State Bank of India, UCO and Corporation Bank.

Of the total CAPEX, the company has spent INR 350 crore till August.

Currently, the company has capacity to produce 300,000 tonnes per annum of pellet, 192,000 tonne per annum of sponge iron, 144,109 tonnes of steel melting, 80,000 tonne per annum of roiling mill, 128,000 tonnes of structural rolling and 24 MW of power plant. It also has coal washery and railway siding. Besides, the company has two iron ore beneficiation plants of 5 million tonnes per annum each at Jabalpur and Katni in Madhya Pradesh.

Mr Saket Agrawal director of MSP Group said the company is focused on strengthening its backward integration by increasing the production capacity for sponge iron, pellets and power. He added that “The iron ore beneficiation plant has helped us to bring down cost of steel production by INR 4,000 a tonne. The company's raw material cost will be down further when we start sourcing iron ore from mine allotted to us in Chhattisgarh. The mine has reserves of 35 million tonnes and will be operational by FY'14.”

(Sourced from BL)