The company, which has already acquired 50 acres of land for this, will fund the project through internal accruals as well as finances from the Industrial Development Bank of India (IDBI) and the ICICI, among others. The first phase of the project is likely to be commissioned within a year.

Bhushan Steel deputy general manager (materials and contracts) Anil Ahuja in a letter of expression to the Maharashtra state government said that the decision has been taken because the company wants to diversify in the western part of the country after expanding its activities in the northern and eastern regions. The company, which will manufacture cold rolled (CR) and galvanised sheets, has decided to use the Patalganga facility mainly for exports.

A company spokesperson told The Financial Express that it would like to take the fullest advantage of Patalganga's strategic importance situated as it is near a port. "The company will utilise this facility to cater to the Indian markets as well as export its products to the European, American, Middle Eastern and other international markets," he added.

Bhushan Steel & Strips Ltd, which had withdrawn a Rs 5,000 crore investment plan in the coastal Ratnagiri district during the previous Shiv Sena-BJP alliance rule, has decided to increase its base in the country's fast growing western region. The company will set up a 12 mw captive power plant at Patalganga.

The company has requested the state government to relax certain conditions laid down by the department of envirionment and energy. According to their guidelines, companies are restrained from putting up a plant within a radius of 2 km from a river bank. In addition to this, no captive power plants are allowed for new industries presently being set up in Maharashtra except in the D plus zone.

However, state industries minister Patangrao Kadam has assured the company that he will look into the matter and do the needful. The company's vice chairman Sanjay Singhal, its vice president RP Goyal and its manager (finance), GS Rathore on Wednesday held detailed discussions with the state industries secretary Vinay Bansal in Mantralaya.

Bhushan Steel's gross sales have shot up to Rs 297.64 crore during the quarter ended June 30 this year from Rs 214.96 crore in the previous year. The net profit has shown a marginal increase at Rs 12.21 crore from Rs 8.20 crore. Sales during 1999-00 stood at Rs 956.40 crore.

The company has recently commissioned a greenfield CR mill plant with an investment of Rs 300 crore to manufacture 1,50,000 tonne of CR sheets in West Bengal.