India's Sathavahana Ispat to Invest $77 Million on Integrated Project in Andhra Pradesh

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Researched by Industrial Info Resources (Sugar Land, Texas)--The board of directors for pig iron, metallurgical coke and cogeneration power company Sathavahana Ispat Limited (BSE:526093) (Hyderabad, Andhra Pradesh) has approved an investment outlay of $77 million to develop an integrated project that will include a 190,000-ton-per-year ductile iron pipes manufacturing plant; a 298,800-ton-per-year sinter plant; a 15-megawatt (MW) captive power plant; and the modernization of the company's existing blast furnace. Subject to securing all the necessary regulatory and environmental clearances, the project will be developed at the site housing the company's operational pig iron manufacturing unit at Haresamudram in the Anantapur district of Andhra Pradesh.

Sathavahana Ispat was incorporated in 1989, and its 210,000-ton-per-year pig iron-manufacturing unit uses the China-Shougang technology. The company's mini-blast furnace produces high-quality iron with at least 93.5% iron and 4% carbon content. The company's 450,000-ton-per-year metallurgical coke-making unit at Kudithini, in the Bellary district of Karnataka, is based on Anshan technology, which is owned by the Anshan Iron and Steel Group Corporation (Anshan, China). With the production of metallurgical coke, a key raw material required for iron making, Sathavahana Ispat performed a successful backward integration.

The company's 30-MW cogeneration plant at Bellary has been in operation since 2008. A 10-MW capacity expansion project is under way that is likely to be completed by December 2010. A cogeneration plant, also known as a combined heat and power plant, generates both electricity and heat.

Steel-trading major Stemcor Holdings Limited (London, England) has a stake of 14.7% in Sathavahana Ispat. In January 2010, there were reports that Stemcor was keen to increase its stake to 20%, but Sathavahana strongly denied the reports.

The announcement of the company's capacity expansion plans has resulted in increased trading, and the company is likely to see a jump of 20% in its bottom line by 2012.

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