Update: Indian Seamless plans Australin venture with BSL, Breitenfeld
03 January 2006
Mumbai: The Pune-based precision seamless tubes and speciality steel manufacturer, ISMT Limited, part of the Rs900 crore Indian Seamless group, which has agreed to provide technical and engineering services for setting up a seamless tubes and steel mill in Australia, expects the project to emerge the lowest-cost producer of seamless tubes in the world.
As
reported by domain-b yesterday (Indian
Seamless plans Australin venture with BSL, Breitenfeld)
the company has signed a proposal of cooperation with
Boulder Steel Limited of Australia and Breitenfeld Group
of Austria to supply its technology know-how for this
project from which it could earn up to 35-per cent equity
(along with some financial contribution) and be the major
shareholder in the joint venture project. The three companies
would signing the modalities of taking the project ahead
in the near future.
The company says the proposal is the first of its kind;
with companies from three continents pooling in their
technical expertise to make available globally acceptable
quality of seamless tubes at the most competitive prices.
The project will be located at Ipswich in Australia's
North-eastern state of Queensland, which offers cost advantages
in raw materials, energy, and skilled labour.
The promoters have expressed the view that this joint venture would be able to produce the lowest cost seamless tube in the world. The Queensland government in Australia has assured facilitation and financial support for the joint venture.
O P Kakkar, MD and. Rajiv Goel, CFO, ISMT Limited, in a joint statement, said, "We have been operating internationally for a long time as manufacturers of seamless tubes but this project would provide us with the challenge of setting up and operating a plant in a different cultural environment." They, also, aver that they are looking for "manufacturing locations that provide better economics of operations and implement marketing strategies that make us unbeatably competitive".
The proposal of cooperation between the three parties is for $300 million to facilitate production of 350,000mtpa of seamless tubes. The turnover of the proposed JV company, at current prices, is projected at $400 million. The capacity of the plant would be increased to 1 million tpa.
ISMT Limited would provide the detailed engineering, design, procurement, and construction management for the project, opening up opportunities for Indian equipment manufacturers. ISMT Limited, taking on the lead role in a project of this scale, is looking at growth through strategic partnerships that would open up opportunities for improved global competitiveness.
