The offer for the joint venture was given by SAIL in October. The capacity of the mill will be around 0.4mt which could be extended to 0.6mt.DSP has a slightly adverse product mix with about 56 per cent of semis, and this affects its profitability. The plant produces billets through the continuous casting route as well as rolled billets and blooms through its old blooming and billet mill.

In the present market conditions DSP is comparatively better placed with enough market for its wheels and axles and merchant products. Its other finished products include skelp and sections. With the setting up of the finishing facilities at Durgapur, DSP will be able to improve profitability besides enhancing its product mix, the release said.

Besides, DSP hasalready signed a memorandum of understanding (MoU) with two outside parties for machining of loco wheels for the railways. Both the parties, Mohta Coal Co Pvt Ltd and Bardhaman Development & Construction Co, will machine 5,000 wheels for DSP annually. The parties will be given forged/rolled heat treated loco wheel blanks for machining, inspection, ultrasonic, hardness test etc. They are expected to start the job in about six months.

The Railways require about 25,000 loco wheels annually, but owing to restricted machining facilities for loco wheels DSP was able to fulfil only about 2,000 to 4,000 of their requirements. Loco wheels normally take about 2.5 times the normal wheel production time. DSP provides the Railways with about 45,000 wheels a year which consist mainly of broad guage wheels.