May 2007 - SIMA

SPONGE IRON INDUSTRY IN ORISSA
Back Ground:
The industry was an early starter in the State. Barring
the semi commercial unit of Sponge Iron India Ltd.
established in 1980, commercial production in the
country started with the plant established in 1984
by Orissa Sponge Iron Ltd, which was quickly
followed by Tata Sponge Iron Ltd. in 1986. Since the
liberalization of steel sector Sponge Iron Industry
attracted investment by small medium entrepreneurs.
The State Industrial Policy of 1992, 1996 and 2001
gave importance to the industry by placing it in
favoured thrust area. The industries grew steadily.
2 plants were established in 80s, which rose to 7
plants in 90s. Since year 2000, 82 plants came into
operation while 27 plants are in various stages of
construction.
These are all coal based sponge plants of varying
kiln sizes and capacities. Smallest group of kilns (25
to 50 TPD) are 54 in operation and 7 under
construction. It is worthwhile mentioning that 13
plants are having single such kiln of which 9 are
operating and 4 in progress. As the economics of
the single small plants is not encouraging, they are
planning to upgrade their capacity by adding
additional kilns.
Gouri Shankar Agarwal,Chairman,
Orissa Sponge Iron Manufacturers Association
The most prevalent kiln size is 100 TPD. Among the
operating plants, there are 103 kilns of the size and
7 are being added. Besides there are 23 kilns under
construction in new plants. Out of this single kilns
are operating in 18 plants while 3 kilns are under
expansion of the operating units. Besides 5 new
plants are having single kiln under construction. The
operational economics warrant upgrading of these
single kiln units to at least 200 TPD capacity.
Of the large size kilns of 300 to 500 TPD capacity
there are 14 kilns in operation while 2 operating
plants are expanding by 1 kiln each. Besides there
are 13 plants of this size under construction and
one of them proposes future expansion by one
additional kiln.
Capacity:
The cumulative installed capacity of 82 operating
plants is 5.272 Million Tonnes. The combined
capacity addition on completion of 27 plants under
construction will be 2.22 Million Tonne. The ultimate
capacity of all plants will be approximately 7.492 (say
7.5) Million Tonne per annum.
Production:
The production in the operating units are as follows:
· 2003-04 and 2004-05, yearly : 1.925 MT/Year
· During 2005-06 the production increased to : 2.26 MT.
· The Capacity utilization of the Operating plants is : 57.11%
The low level of production is mainly due to non-availability of Coal and Iron Ore of suitable quality.
Investment:
The investment for the Sponge industries is Rs. 3359
Crores. All the industries shall have to establish
WHRB based power units for which additional
investment of Rs. 2268 Crores is required. It is
estimated that cumulatively 567 MW power will be
generated by the plants, which will be fully utilized in
converting sponge to steel after meeting power
consumption in sponge making.
Employment:
The employment potential of the industry is assessed
at 18557 direct and 19228 indirect, totaling 37785.
Land:
The land occupation by these industries is 2998
Acres or 1199.2 Hectares. Besides land will be
required for solid waste disposal yards and
plantation.
Water Supply:
The industry will require 900MLD (Million Liters per
Day), which is not fully met from ground water and
surface sources as available in the locality.
Projects for bulk industrial water supply in all the
clusters need to be speedily executed by tapping
surface flow and underground sources.
MAY-2007/22