Steel Industry Getting more Investment

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Steel Industry Getting more Investment

March 8: With the government's policy of encouraging the iron rod industry to produce billets in the country itself, new steel industries have started opening while the old ones have been pouring more investment.  A total of Rs 8.44 billion is being invested in a new steel industry and four such industries that are currently operational.

After the government introduced zero tariff on import of sponge iron through the replacement bill, the investment will be added to the production of iron rods and construction materials in the current fiscal year (FY 2078/79). A new steel industry, Sarvottam Steels is opening soon and will  produce billets and other materials, while four existing industries are adding huge investments.

According to the Department of Industry, Kathmandu Steels, Swastik Rolling Mills, Premier Steel and Hulas Wire have taken permission to import sponge iron and increase investment in billet production. The department has given approval for the investment as well. These industries have been allowed to produce billets by importing raw materials like sponge iron, said Khagendra Bahadur Basnet, director of the department.

He said that there is an increase in the number of people seeking permission for investment and capacity expansion to produce billets during this period. According to the department, the new industry Sarvottam Steels is about to be established with the highest investment.

Saurav Group is all set to operate the industry, which has already received approval for environmental impact assessment, with an investment of Rs 3.27 billion.

The steel industry is about to be established on 15 bighas of land owned by the company in Maniyari of Birgunj Metropolitan City. The industry has been registered with the Department of Industry, with a proposal to produce 441,000 metric tons annually.

The industry will give employment opportunity to 537 people. Among them, 200 will get employment during the construction of the industry and the rest will get employment during the operation phase of the industry.

The industry will have open area, green garden, two open water storage tanks, storage area, vehicle parking lot. Two induction furnaces of 30 metric tons will be set up in the industry for the production of iron products. The company informed that the industry needs 2.5 MW of electricity for the production of steel products.

Most of the industries licensed by the department are located in Sunsari district. Apart from Kathmandu Steels of Nawalparasi and Sarvottam of Parsa, three other industries are located in Sunsari district. According to the department, Swastik Rolling imported sponge iron and invested an additional Rs. 1.93 billion investment for production of billet and other products amounting to 0.13 million metric tons.

Similarly, Kathmandu Steels has set an annual production target of 0.177 million metric tons of billet and iron products and has already acquired permission for investment of Rs 1.39 billion. Also, Premier Steel has set an annual production target of 0.80 million metric tons and has also acquired permission for investment of Rs 1.14 billion from the department. In addition, Hulas Wire has set an annual production target of 0.112 million metric tons and is aiming to add Rs 670 million new investment.

According to the data provided by the department, 31 iron rods and steel industries are in operation in the country as of 2078 BS. However, only 6 of these industries have been producing billets in the country using sponge iron and scrub. According to the department, the total annual capacity of the existing industry is about 3.6 million metric tons and the annual demand is about 1.2 million metric tons.

Nepal is self-sufficient in producing iron rods and iron-based construction materials. The government has recently reduced the customs duty on import of sponge iron to zero with the motive of producing billets in the country. It is also likely that there will be enough raw material in the country after the operation of Dhaubadi iron mine.

 

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