After remaining on the drawing board for decades, the Kadapa steel plant has now finally taken off, a development that will radically alter the industrial and economic landscape of Andhra Pradesh.
The Chief Minister Mr Y S Jagan Mohan Reddy, who looks intent on ensuring that the steel plant comes up at the earliest, laid the foundation stone for the project last week in Jammalamadugu constituency, making it clear that he will not brook any more delay.
This is the third time a foundation stone is being laid for the project, with former chief Minister Mr Y S Rajasekhara Reddy doing it in 2007 and Mr N Chandrababu Naidu following it up in Kambaladinne village of Mylavarammandal with an outlay of Rs 18,000 crore on December 27 last year.
Boon for Rayalseema
For the backward Rayalaseema region, which is parched for new industries and investments, it will be a major boost, as the plant will not only be a major employment generator but fuel a fresh spurt of development as a string of upstream and downstream industries would come up around the plant.
“Now there is no stopping (for the steel plant to take off). We are looking to invite private participation both from Indian companies as well as MNCs. And if this gets delayed, we will take up the project on our own,” said Mr P. Madhushuan, CMD of AP High Grade Steels Ltd (corporate entity of Kadapa steel plant), to VIZAG INDUSTRIAL SCAN.
This development comes close on the heels of India’s largest iron ore miner, National Mineral Development Corporation (NMDC) signing an MoU with the AP Government for supply of five million tonnes of iron ore to the AP High Grade Steels Ltd.
NMDC said it will increase the ore supplies as and when the steel plant expands. It has recently received licence to increase its iron ore production at Kumaraswamy mines from the present seven million tonnes per annum to 10 million tonnes per annum.
Stating that this will give a much-needed boost for the backward Rayalseema region, he said the plant will facilitate a string of ancillary industries. “This will be the single largest investment for the region and the Chief Minister is determined to complete the project in three years,” said Mr Madhusudan.
AP High Grade Steels Ltd.
- Spread over 3000 acres
- Projected Employment 25000 people
- To produce flat Products for Auto Sector
- Capacity of plant to be increased to 10 million tonnes
Expansion to 10 mt capacity. The plant will have a phase-I capacity of three million tonnes envisaging an investment of Rs 17,000 crore.
Given the potential, the plant will be expanded in phases to reach 10 million tonne capacity. Mr Jagan Mohan Reddy is keen on wrapping up the phase-1 of the project in three years, after which it will open up employment avenues for over 25,000 people. It will come up over a sprawling extent of 3,295 acres.
An initial provision of an amount of Rs 250 crore has been made in Budget 2019-20 for the establishment of the plant.
The plant, rightfully, will be producing flat products in the cold rolled and hot rolled segments primarily for the automobile industries. Auto majors such as Huyndai and Kia are located in the close vicinity of the plant, which will be its mainstay market. Indian, foreign investors show interest
Mr Madhusudhan said they have already started informal talks with prospective Indian and foreign investors. “They (prospective investors) have shown interest in investing up to $ six to seven billion. For, the capacity of the plant will be increased in a phased manner to 10 million tonnes. We will be offering equity stake to them,” he said.
Asked about the rationale behind setting up the plant in a subdued steel market, he said this (trend) was temporary, as in the long term steel demand is bound to rise. “We currently have a per capita steel consumption of 70 kg, as against the global average ofr 215 kgs. India is planning to reach a total steel making capacity of 300 million tonnes by 2030, as against the current capacity of about 140 million tonnes” he pointed out.