Steel maker Micky Metals holds back expansion project over high power cost

TMT bar manufacturer Micky Metals

Ltd is holding back an expansion plan at its steel making plant in West Bengal's in Birbhum district as "high power tariff" of the state-run electricity distribution company is making the project "unviable", an official said on Friday.

The power cost in areas under the West Bengal State Electricity Distribution Company Ltd (WBSEDCL) is "nearly double of what is levied in localities where Damodar Valley Corporation provides electricity", he alleged.

"The average power cost in Birbhum is Rs 8 per unit from WBSEDCL, while the electricity tariff in Durgapur under DVC command area is just about Rs 4 a unit. So it is unviable to put an expansion project here, unless the government intervenes to resolve the issue," Micky Metals director Saket Agarwal told PTI.

The company was planning for a billet making facility as an expansion of its steel plant in Suri, he said.

Manufacturing of billet is a backward integration process to make TMT bars that are used for construction.

"We have appraised the power department of the issue and the steel industry bodies have also urged the government to take necessary action. An additional 10 per cent input cost is just not feasible when margins are not more than four per cent," Agarwal said.

When contacted, an official of WBSEDCL declined to make comments on the regulatory issues and said that it requires the state power department's intervention.

"If the government removes the hurdle, more steel companies will open mills in the backward districts such as Birbhum," he said.

Meanwhile, Micky Metals has roped in Tollywood actor Jishu Sengupta as the company's brand ambassador to promote its products.

Agarwal said the company now has a manufacturing capacity of one lakh tonne and the main market for its products is West Bengal.

The steel maker is also expanding its footprint in Bihar, Jharkhand, Odisha, Assam, Uttar Pradesh, Rajasthan, Haryana and Jammu & Kashmir within the next six months, he added.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel