April 24 (Bloomberg) -- Rashtriya Ispat Nigam Ltd., the smaller of India’s two state-owned steelmakers, started a new blast furnace, completing a $2.3 billion expansion.
The 2.7 million metric-ton-a-year furnace was fired today, bringing annual plant capacity to 6.3 million tons, Chairman A.P. Choudhary said in a telephone interview from the southern city of Vishakhapatnam, where the mill is located.
India’s steelmaking capacity is forecast to increase more than 7 percent this year to 100 million tons, according to G.K. Basak, executive secretary at the steel ministry’s joint plant committee. The government plans to spend $1 trillion in the next five years to build roads, power plants, railways tracks and airports to help the economy return to a targeted growth rate of 9 percent.
“Besides urban infrastructure, we see a lot of demand coming from rural India,” Choudhary said. “We’ll also target high-end industries like pipes and tubes and auto forging.”
Steel demand in the country is expected to grow 8 percent this year, higher than the 5.5 percent rate in the previous year, as lower interest rates boost demand for homes, automobiles and appliances.
India’s central bank last week cut the benchmark repurchase rate by a greater-than-forecast 50 basis points, seeking to bolster growth with the first reduction since 2009.
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