Salhang Tendrel (groundbreaking) ceremony for the construction of a steel manufacturing plant at Motanga Industrial Park, Samdrupjongkhar was held yesterday.
The plant will be set up under Druk Metallurgy Limited, a new foreign direct investment joint venture between Druk Holding and Investments Ltd. and its Indian partner Dilip Kumar Goenka, the principal partner of KD Iron and Steel in Assam.
DHI’s Associate Director of Department of Investment, Sherab Namgay, said while the production would be mainly exported to India given its huge demand, the company will also supply to domestic market which would be very negligible.
He said that the plant is expected to increase earnings from exports and ease the huge current trade deficit that Bhutan has with India.
Bhutan’s trade deficit in the first quarter of this year, including trade in electricity, is estimated at around Nu 10B. Balance of trade with India alone accounts for more than Nu 9.5B in the red.
According to the provisional trade statistics for the first quarter of 2018, Bhutan imported commodities worth more than Nu 17.4B. Its export value, including electricity, was around Nu 7.5B.
Besides earning Indian Rupee from export, the company is expected to employ about 165 people in the first phase and 219 people in the second phase.
Sherab Namgay said that there is no steel manufacturing plant of such magnitude even in northeastern India.
DHI conducted a pre-feasibility study and found that the venture would generate profits from the first year of operations.
As the investment arm of the government, DHI has been exploring investments in various business sectors that have immense contribution towards the socioeconomic development of the country.
The energy intensive integrated steel plant will produce MS billets and TMT bars consuming 30 mega watts of power a year.
The plant will have the state-of-art steel melting facility based on Induction Furnace (IF) Technology, Continuous Casting Machine (CCM), hot charging to the rolling mill stands together with the necessary automations and automatic materials handling systems, including advanced environmental pollution control equipment.
The plant could produce 200,000 metric tonnes (MT) of billets per annum in the first phase and 200,000MT of TMT bars per annum in the second phase. The first phase will complete in July next year and the second phase of construction in July 2020. Billets are used as raw material to produce the TMT bars.
The plant is built at the cost of Nu 1.3 billion and will occupy 6.712 acres.