Mesco Steel kicks off work on expansion
21 November 2015
Leading steel producer Mideast Integrated Steel Ltd, flagship company of the $4 billion Mesco Group, has initiated work on brownfield expansion of its plant at Kalinganagar in Jajpur district.
The company is expanding its steel making capacity from one million tonne per annum (mtpa) to 3.5 mtpa. The expansion is pursued by the company at a cost of Rs 12,000 crore, said Natasha Singh Sinha, director (finance), Mesco Steel.
It has completed all necessary formalities and expects to obtain environment clearance in a few weeks.
"We are glad to inform that this would be the first plant of 3.5 mtpa capacity to have come up on less than 600 acres of land in the country. The environment clearance for expansion to 3.5 mtpa is expected in a few weeks as all necessary processes have already been completed," said P C Sahu, joint managing director, Mesco Steel.
Simultaneously, it will go for a revamp of Maithan Ispat (a company it acquired in March 2015) at an estimated cost of Rs 1,000 crore. Maithan Ispat (now referred to as Mesco II) already has a steel capacity of 0.8 mtpa at Kalinganagar, expandable to one mtpa. The revamp of Mesco II is expected to happen in two years.
"Expansion work at Maithan Ispat has also been taken up, loan has been sanctioned by a consortium of banks for the expansion and necessary equity has already been infused. In about 12 months time, heavy beams and rebars will be rolled out from Maithan Ispat," added Sahu.
As of now, the Mesco plant has been shut down for relocating some facilities with a view to taking up expansion of the steel plant. Depending on the progress of the relocation work, the plant will resume operations in three to four months, said a company release.
Mesco Group owned Roida iron ore mines in Barbil and this together with other business activities are expected to generate cash flows for expansion work at steel plant.