India's Mishra Dhatu Nigam Limited to Set Up 6,000-Ton-per-Year Hot Plate Mill

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Researched by Industrial Info Resources (Sugar Land, Texas)--Indian public sector specialty steelmaker Mishra Dhatu Nigam Limited (MIDHANI) (Hyderabad, Andhra Pradesh) will invest $86.5 million to set up a hot plate mill. The proposed 6,000-ton-per-year manufacturing facility will produce ultra-strong wide steel plates. These plates are used extensively in automobiles, nuclear reactors and motor castings for satellites and rockets. The plates have been used in motor castings of the Geosynchronous Satellite Launch Vehicle and the Polar Satellite Launch Vehicle developed by the Indian Space Research Organization (Bangalore, Karnataka).

The project has received the necessary approvals from the Indian government. The Defence Research and Development Organization (Bangalore) is expected to invest about $43.3 million in the project, while the remainder will be financed from internal accruals and debts from financial institutions. Presently, the ultra-strong steel used in nuclear and aerospace applications is produced by the state-owned Steel Authority of India Limited (BSE:500113) (SAIL) (New Delhi) at the company's Rourkela steel plant. Sources have indicated that difficulty in importing specialty steels and growing domestic demand has led to MIDHANI's investment in this area. The manufacturing facility, which will also include a vacuum arc furnace, a forging press and an electro slag-refining furnace, is expected to begin operations by 2012.

Experts have observed that demand for specialty steel is expected to surge in the backdrop of the recent India-U.S. nuclear agreements. In October last year, the Nuclear Suppliers Group lifted the 34-year nuclear trade embargo on India. Subsequently, India signed nuclear fuel supplies agreements with France, Russia and other countries. Recently, Indian Prime Minister Dr. Manmohan Singh expressed optimism that if the nuclear program was managed well, then by 2050, India's nuclear power generation capacity could reach 470,000 MW. By 2014, India plans to have four 700-megawatt pressurized heavy water reactors (PHWR). Each PHWR is estimated to require 700 to 800 tons of specialty steel. MIDHANI is confident of securing about 50% of the supply orders for this project. Presently, India's specialty steel demand is about 5,000 tons per year. MIDHANI fulfills about 2,000 tons per year of this demand, while the remainder is taken care of by SAIL and Jindal Steel & Power Limited (BSE:532286) (New Delhi). Industry analysts forecast that in the next five years, India's demand for specialty steel will reach 6,000 tons per year.

In January, MIDHANI was conferred the "Mini Ratna - Category 1," which will enable the company to take independent decisions regarding operations, management, and investments of about $107 million. MIDHANI also manufactures "8 Superfer 800L," an iron-based super alloy, which is used in the steam generating units of nuclear reactors. The company also fabricates core steel, which is used in fast breeder reactors. The company is one of only three companies in the world that produce this type of steel. In 2008-09, MIDHANI's sales turnover was about $66.23 million, a significant increase from the $55.19 million reported in the previous fiscal year. In April, the company announced that its order book value stood at $151.5 million, with orders worth $926.4 million secured in 2008-09. MIDHANI is also part of the ambitious $10 billion low-activated ferritic and martensitic steels project for the International Thermonuclear Experimental Reactor Program. India, which is one of seven countries associated with this project, joined the research group in 2005. The experiment is expected to be completed in 2018.

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