KIOCL LTD (Formerly Kudremukh Iron Ore Company Limited), a Government of India undertaking announced the setup of a Ductile Iron Spun Pipe (DISP) plant with the target of producing 20,000 tonnes per annum.
This proposed project announcement comes as a result of growing demand for DI pipes in the Indian market which is a result of major projects for fresh infrastructure and improvement in existing systems for water supply, waste-water drainage and reuse of waste-water for industrial purposes in India.
The KIOCL Project: Part of Forward and Backward Integration
KIOCL is currently operating Iron ore pellet plant and blast furnace unit at Panambur near Mangalore. With the aim to increase profits and expand its area of scope, KIOCL is adopting forward and backward integration of its existing blast furnace in two steps. The first one being the addition of a new 20,000 tonnes DISP plant and then establishing a non-recovery coke oven plant with a total production capacity of 180,000 tonnes per annum coke and 10 MW cogen power plant using flue gas.
According to a report published in The Hindu Business Line Mr. MV Subba Rao, Chairman and Managing Director of KIOCL Ltd. said “If everything goes well, we are going to start the groundwork for DISP project before December. The proposed project is expected to create a minimum of 500 direct employments in the region.”
Utilization of present infrastructure and optimization of resources
The proposed project site is located at the existing premises of the KIOCL blast furnace complex at Baikampady Industrial area, Mangaluru. This is a well-established site where little new infrastructure would be required. The total land available is around 10 hectare within the complex and 3 ha around the existing township for setting up a greenbelt (required under the national environmental norms). The proximity to blast furnace will also help in smooth transportation without much loss of energy.
Opportunities in Water and Sanitation Sectors
Considering various government initiatives in water supply and sanitation sector, demand for spun pipes may witness a sharp increase.
Atal Mission for Rejuvenation and Urban Transformation
Under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), total budget for State Annual Action Plan (SAAP) is INR 77,640 crore, out of which 39,011 crores (50%) has been allocated to the water supply sector, INR 32,456 crore (42%) to sewerage & septage management sector, INR 2,969 crore (4%) for storm water drainage projects and INR 2,969 crore (4%) to green space and community water conservation projects.
Before the inception of AMRUT in 2015, water supply coverage was 64%. By the end of the Mission (2024), Government aims to cover 100% of Indian households. Another target is to provide 139 lakh water tap connections to achieve universal coverage. So far 22.89 lakh tap connections have been provided.
Other Major Government Projects
The other major upcoming state government projects include sewage network of 450 km in the Digha and Kankarbagh zones of Patna by Bihar Urban Infrastructure Development Corporation, 8036 km of transmission and distribution pipelines in Srikakulam and East Godavari districts of Andhra Pradesh, 1745 km transmission pipelines in Jharsuguda district of Odisha by Rural Water Supply and Sanitation Department (Odisha Government), and Delhi Water Supply Improvement Project (DWSIP).
Spun Pipes – Demand and Supply Gap
The total installed capacity of spun pipes in the country at present stands at 26,81,200 tonnes. Out of this installed capacity for DISP is around 24,52,000 tonnes and CISP (cast iron spun pipes) is around 2,29,200 tonnes. The other major producers of DI/CI pies are Electrosteel, Lanco, Kalahasthi Castings Ltd., Tata Metaliks, Jindal SAW, Electrotherm, etc.
Based on predicted demand / government projects, it is expected that upto 35,76,000 tonnes of spun pipes may be required by the year 2023-24. Whereas, considering current capacity, only about 29,50,000 Tonnes could be supplied. The total gap would be 6,26,000 tonnes presenting a huge opportunity for growth in the sector.
About the Company: KIOCL Limited, formerly Kudremukh Iron Ore Company Limited is a public sector firm under the Ministry of Steel, Govt. of India. It was formed on 2 April 1976 for mining and beneficiation of low-grade iron ore at Kudremukh, Karnataka, India. The Kudremukh mine, one of the largest iron ore mines in the world, was closed in 2006 due to environmental reasons and now it has a pelletization plant in Mangalore. The total installed capacity of the pellet plant is around 3.5 million tons per annum with exports to countries like China, Iran, Japan, and Taiwan.