Kalyani Steels plans green steel production at newly acquired plant
Kalyani Steels currently has total capacity of around 250,000 tonnes and RK Goyal, the company's Managing Director is confident the capacity will be a million tonne by the financial year 2028 (FY28).
Kalyani Steels', which announced the success of its bid to acquire the assets of Kamineni Steel and Power India on January 10, plans to produce green steel at the new plant.
"Finally, we could get a very good quality asset. It is a melt shop. So, we need to set up all the other equipment," said RK Goyal, the Managing Director of Kalyani Steel while discussing details of the acquisition with CNBC-TV18.
Goyal estimates the overall capacity expansion (capex) cost that could be incurred in structuring of the new plant, including finishing, component and heat treatment facilities etc., to be around ₹5,000-₹6,000 crore. The current melt shop has capacity of around 0.36 million tonne, he said, adding that Kalyani Steel will also begin debottlenecking to improve overall capacity.
Kalyani Steels currently has total capacity of around 250,000 tonnes and is working to enhance this to a million tonne by the financial year 2028 (FY28), Goyal said.
The acquisition, facilitated through an e-auction platform under the Insolvency and Bankruptcy Code, 2016, marks a strategic move for Kalyani Steels as it seeks to expand its presence in the steel manufacturing sector.
The assets to be acquired encompass land, buildings, and plant machinery located in Yellareddigudem and Cheruvugattu villages in the Nalgonda district of Telangana.
Kalyani Steels will pay a cash consideration of ₹450 crore for the acquisition, with an initial payment of ₹23 crore already deposited as earnest money. This strategic investment aligns with the company's vision to produce green steel, a commitment emphasized by Goyal.
Kalyani Steels has cash on books of around ₹600 crore and Goyal said it can free up more cash that is currently deployed in working capital for any capex needs.
For more, watch the accompanying video
(Edited by : Shweta Mungre)
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