SAIL to invest Rs 100 cr to revive Malvika Steel

State-owned SAIL on Monday said it will invest Rs 100 crore (Rs 1 billion) to revive its Uttar Pradesh unit, formerly known as Malvika Steel, which the steelmaker acquired last year.

"The total cost of JSU's phase-1 revival has been estimated to be Rs 100 crore (Rs 1 billion)," the company said in a statement here.

SAIL acquired the defunct Malvika Steel for Rs 209 crore (Rs 2.09 billion) last year and rechristened it as the Jagdishpur SAIL Unit.

As part of the revival plan, SAIL will set up a steel mill at a cost of Rs 46 crore (Rs 460 million) to produce items required by infrastructure and construction companies.

"The entire team of JSU has to work with exemplary dedication, zeal and commitment to fulfill the objectives of acquiring the unit," said Steel Secretary Atul Chaturvedi, who along with SAIL Chairman C S Verma laid the foundation stone for the mill.

The TMT bar mill has an annual production capacity of 1.5 lakh tonnes per annum.

"The proposed facilities and product-mix envisaged in phase-1 also include a 10,000 TPA cold forming line and a 13,000 TPA corrugation line," the statement added.

Verma said SAIL also envisages resumption of integrated iron and steel production at JSU under the second phase of its revival plan, for which a feasibility report has been prepared.

Going forward, SAIL said it will also set up a 475-MW gas-based power plant at Jagdishpur through a joint venture.

"The process for identification of a suitable partner has started," it added. The country's largest steel-maker plans to enhance its annual production capacity to about 23 million tonnes from the current output of around 14 million tonnes with an estimated investment of Rs 70,000 crore (Rs 700 billion) by 2012.

SAIL plans to further enhance its annual capacity to 60 million tonnes by 2020 to cater to anticipated demand on account of rapid growth of the infrastructure sector.