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Home arrow News arrow Business News arrow IFC planning to invest $30 million in Kalyani Gerdau Steels Limited
IFC planning to invest $30 million in Kalyani Gerdau Steels Limited Print E-mail
Written by Ramanathan   
Friday, 01 April 2011
New Delhi: IFC is planning to provide a loan of up to $30 million (approximately) to Kalyani Gerdau Steels Limited (KGSL), located in Tadipatri district in Andhra Pradesh. This is intended to partly fund further enhancement of the manufacturing facility with the addition of a Coke Oven plant and a 12MW waste heat recovery based power plant.

The total cost of the Project is expected to be $46 million. The IFC Board of Directors are expected to make the decision on April 30, 2011.

Earlier, in 2010, IFC had extended a $25 million financing to KGSL to partly fund the restoration and modernization of its steel manufacturing facility.

The company's manufacturing unit is located at village Jambulapadu, about 6 km from Tadipatri town in Ananthpur district of Andhra Pradesh on 887 acres of land. The existing facilities have a production capacity of approx. 300,000 tonnes per annum (TPA) of pig iron and billets using the blast furnace route. The Company has plans eventually to expand the steel production capacity to 1 million TPA.

The previous IFC investment involved setting up of a 6 MWe blast furnace waste gas recovery based steam and power generation plant, a sintering plant to better utilize the iron ore fines; vacuum degasser unit and a rolling mill to manufacture value-added products. This project is currently under implementation and the production is expected to commence from September 2011.

The proposed new investment involves setting up of a coke oven plant of 200,000 TPA capacity and a 12MWe power plant that will use the waste heat generated by the coke oven plant to support the existing production capacity of 300,000 TPA.

KGSL is a joint-venture between Gerdau and the India based, Kalyani Group. Gerdau, the majority owner, is a leading steel producer in the world, with a crude steel production capacity of 25 mpta and rolling capacity of 22 mn tonnes, spread over 14 countries. Gerdau is listed on the Sao Paolo, Madrid and New York (for ADRs) Stock Exchanges. Kalyani Group, the other sponsor, is a major Indian industrial group which owns Bharat Forge, which is the second largest forging group globally.

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