``The company is all set to commission the state-of-the-art plant in three months with 95 per cent civil works and equipment erection completed,'' SJK president SK Gupta told The Financial Express. This is the major steel project coming up in Andhra Pradesh.

The complex includes a steel billets plant and a bar and wire rod manufacturing facility with a capacity of 4 lakh tonnes per annum - each through mini blast furnace and BOF technology, which will be commissioned during March 2001.

Gupta said the project is being set up in technical collaboration with Shougang International Trade & Engineering Corporation of China for the supply of technical know-how, equipment for sinter plant, blast furnace and BOF shop, including performance guarantee for production and quality.

The company is also holding talks with Danieli of Italy for process knowhow, critical equipment for bar and wire rod mill, Gupta said.

Mecon, the project consultant, will cooperate in construction, erection and assistance during commissioning. ``Usage of sinters, highest guaranteed productivity and harnessing BF gas will make SJK the lowest cost steel producer in the country,'' Gupta claimed.

To part-finance the project cost, the promoters are chipping in Rs 163 crore (20 per cent of total project cost as a share capital) and optionally fully convertible debentures from financial institutions (FI) to the tune of Rs 124 crore. The FIs - IDBI, IFCI, UTI, LIC, GIC have sanctioned a term loan of Rs 529 crore. The debt equity ratio stands at 1.81:1, Gupta explained.

An agreement has been signed with NMDC for iron ore supply. The company will be importing coke from China. Praxair India Ltd will supply oxygen, nitrogen, argon and continuing casting machines supply from Concast India, Gupta said.

"Asia will be the emerging market and sourcing centre in the next millennium," he said. World steel plants in developed countries have reached optimum consumption levels and their growth in demand is less than 2 per cent as compared to 6 per cent in Asia.

The demand for steel has been picking up, which will touch to 12 per cent from the present 8 per cent during next year. "The gap is expected to widen further in the new millennium," he said.