BCL injects additional P53m into Pula Steel
1 July 2015
BCL has injected a further P53 million to support the construction of its subsidiary, Pula Steel Manufacturing and Casting Plant, said Managing Director Daniel Mahupela when addressing the media recently.
Before the injection of funds in March this year, an initial P89 million was budgeted for the construction of the plant.
Mahupela said the additional P53 million was injected in the company because the scope of designs has been expanded after it was initially reported that the company has exhausted the money and had requested BCL to assist with additional funding.
“According to the initial plan, this plant would have been constructed in two phases with an opening phase production of 80 tonnes per day. However, a change in the initial implementation plan, which included variation in the plant size from an intended output of 80 tonnes to 240 tonnes of billet per day required a major modification in the power configuration from an initial 5.5 MW to 15 MW.
“As a result phase two of this project was brought forward and it affected a number of components and processes of the plant, which required more funding,” he explained.
Mahupela added that the two phases of construction have stretched the initial production date from December last year to August this year. He noted that the incorporation of phase two of the project will boost employment at the company instantaneously rather than when it could have been deferred to a later date.
“The project was aimed at employing 250 workers in the primary phase, but now this number has doubled as a result of this decision (bringing in phase two),” noted Mahupela.
He said the development meant that such production levels would ensure greater shareholder value in terms of projected returns on investment.
The company will create jobs for 1,000 individuals once it has reached full production capacity. Pula Steel is scheduled to commence production in August this year, according to Mahupela.
The company, it is anticipated, will export some of its products to Dubai and Saudi Arabia. Pula Steel Managing Director, Ranvir Verma also told Mmegi Business that there are also prospective markets in countries such as Iran and India. BCL owns 55.5 percent of Pula Steel while other shareholders are the Citizen Entrepreneurial Development Agency (CEDA) who hold 26 percent, the Vermans family, which has shares amounting to 17 percent and Wealth Generation Holdings a company owned by locals, Brian Mosenene and Mpho Balopi, which has six percent shares in the company.
The target market for the company is domestic industries although the company will also be selling to the international and regional market.
The domestic market for steel in Botswana stands at P2.5 billion tonnes per annum and most steel used currently is imported.