April, 23 2006
Orissa announces new resettlement & rehabilitation policy
Orissa cabinet has approved Resettlement and Rehabilitation Policy 2006 for various Industrial and Irrigation projects in the state. The Cabinet, presided over by Chief Minister Mr Naveen Patnaik also formulated special package for the steel plant by POSCO in Paradip and various plants coming in Kalinga Nagar Industrial Complex.
Orissas Chief Secretary Mr Subash Pani said that the new policy has enhanced the compensation amount for the land and house building assistance, cash compensation for self employment and assured job to one member of the affected family. The definition of family has been widened to include all sons above 18, unmarried daughters/sisters above 30, physically or mentally challenged members, orphans and widows as a separate unit. This means each gets the full benefits apart from the job that goes to any one of them. The stocks option has been left open. If the oustees wish, they can accept half the compensation in cash while the rest is locked as scrips, which can be liquidated after five years.
Other highlights include job for one person from each undivided displaced family, one acre land to build house together with Rs 1.5 lakh, up from Rs 50,000, for mining & industry oustees, aid of up to Rs 5 lakh for self-employment, land for irrigation project oustees or as an alternative cash Rs 1 lakh per acre for irrigated land and Rs 50,000 per acre for non irrigated land.
The government has also minimized its role. An industrialist can negotiate with the prospective oustees directly. If he wants the government to acquire the land it would step into the picture.
POSCO India Project Opposition asks for giving up export demand
Orissa leader of opposition Mr JB Patnaik demanded that POSCO should give up its intention to export iron ore from the state. "POSCO's proposed iron ore export from Orissa is meant for its Korean facilities. If Indian companies are able to produce quality steel from the same ore, why can't POSCO, which claims that the ore has high alumina content?" Mr Patnaik asked in a press conference .Moreover, it had sought 400 million tonne of extra ore at pit head rate for export purpose, which has created suspicion, he said.
Mr Patnaik said while Jharkhand allowed Mittal Steel to set up steel project without conceding to their demands the Orissa government signed the MoU going by the terms and conditions forwarded by POSCO. Mittal Steel had also raised similar iron ore export demand but the Jharkhand government bluntly rejected it he said.
Mr JB Patnaik also accused Naveen Patnaik government of being extra soft to POSCO.
RSP achieves new milestones in 2005-06
SAILs Rourkela Steel Plant has registered its best ever annual performance since inception in all its major area s during 2005-06 with hot metal production of 1.78 million tonnes and 1.62 million tonnes of saleable steel.
Production of plate mill plates during 2005-06 registered growth of 13% over 2004-05, hot rolled plates 20%, galvanized steel 20%, cold rolled 10% and spiral wield pipes 76%.
RSP also registered the highest ever converter lining life of 3,300 heats in steel melting shop-II and 1,100 heats in steel melting shop-I and lowest ever energy consumption of 8.48 G Cal per tonne of crude steel was also achieved during the year. Specific water consumption and coke rate also came down by nearly 6% and 4% respectively bringing down the cost of production.
Punjab based Vishwkarmas steel units found evading laws
It is reported that Central Excise department has discovered manipulation amounting to Rs 15 crores during last five years by Kanganwal based two sister concerns Vishwkarma Steels Ltd and Vishwkarma Ispat Ltd. If penalty and interest are added, it will come out to be more than Rs 30 crore. The actual amount is still being worked out. It is reported that these companies were maintaining two sets of accounts and differences between them amount to Rs 86 crore in sales and Rs 77 crore in purchase in last five years.
It is reported that these units were procuring purchase invoices without physically receiving the goods to avail of fraudulent input credit to offset the Central excise duty on their finished goods. The units have also been found showing excessive use of ferro alloys, disproportionate to the grade of materials manufactured. Huge variation in monthly burning loss is also noticed.
Investigations are underway and the excise department expects to unearth linked evasion by suppliers and buyers and also by other such units.
Another Indian Minister supports Mittal Steel
It is reported that Indias Union Minister for State for Industries Mr Ashwani Kumar said that he was against any intervention by Belgium Government on Mittal Steels bid for Arcelor.
"Allow Arcelor's shareholders to decide on this. The government is against interference in any cross border transaction" he told reporters.
POSCO India Project To attract more investments in ancillaries
POSCO has claimed that its steel plant will help attract more investment in India for the ancillary industries.
POSCO-India is participating at the Hannover Trade Fair in Germany being held from April 24 to 28, and will be exploring the fair as a platform to showcase its project and hopes to attract more investment in Orissa for the ancillary industries required for its proposed steel plant, the release said.
Some of the ancillary industries would be shipbuilding, coal, chemicals and cement.
Jindal Saw to raise $150 million
Jindal Saw Ltd will raise 150 million dollars through issue of shares and securities in domestic and international markets. The shareholders in an extra ordinary general meeting approved the raising of funds and allotment of warrants convertible into equity shares of the company to the promoters.
JSL is a producer of pipes used in the energy sector for transportation of oil and gas and manufactures arc pipes, spiral pipes, carbon, alloy and stainless steel seamless pipes and tubes.
KIOCL employees go for VRS
It is reported that almost 350 employees Kudremukh Iron Ore Company Limited have applied for VRS during January to April 10th and many applications have already been approved. It is reported that at least 10 employees are applying for VRS every week and their number may go up in the days to come.
When the factory was closed on December 31, 2005 there were 1950 regular employees.
It shows that KIOCL employees are slowly losing their all hopes to get rehabilitated between Government assurances and the Supreme Court directions. After KIOCL was closed government assured the employees that though mining was closed in Kudremukh, factory would be run by continuing the mining activity in Ramanadurga.
Kudremukh Daily Wage Employees Welfare Federation would launch its second phase of struggle if the Government would not plan for the future of these employees.
China's GDP in 1st Quarter Grows 10.2%
China's economy soared by a stunning 10.2% in the first quarter of this year, fueled by strong investment, a government spokesman said. Gross domestic product reached 4.33 trillion yuan (about $540 billion) spokesman Mr Zheng Jingping for the National Bureau of Statistics announced at a press conference. "The growth seems to be on the fast side, but I want to say such a rate still falls in the range of the potential economic growth. It remains basically normal, though reaching the upper limit," he said. "It should arouse concern, and actually has aroused our attention" Mr Zheng added.
In an interview with Xinhua, Mr Wang Xiaoguang, a macro economics research fellow with the National Development and Reform Commission, said he believes the economy was largely being driven by hefty investment. Investment in roads, factory equipment and other fixed assets totaled 1.39 trillion yuan, a sharp growth of 27.7% or an increase of 4.9% points YOY. Mr Wang said local governments arranged too many big projects in 2006, the first year for China's 11th five-year development blueprint. He called for intensified government efforts to tighten land approval and lending.
China's economy has grown at an around 10% clip for each of the past three years.
Arcelor says still has anti Mittal Steel options
Arcelor's chairman Mr Joseph Kinsch told Saturday's edition of De Tijd newspaper that it has not used up all its options in its defense against an unsolicited takeover offer from Mittal Steel. "We are involved in a war. We do not show our weapons. But we are very active and, believe me, we have a lot of imagination. We have not used up all our ammunition. But I cannot say more."
Earlier this month, Arcelor unveiled measures to fend off Mittal Steel's bid by ring fencing newly acquired Canadian unit Dofasco beyond the reach of the predator and offering its shareholders a higher dividend and an extra 5 billion euros in cash.
Mr Kinsch said that Arcelor was not panicking with its pledge to give shareholders 5 billion euros, originally on offer if shareholders rejected the advances, but now possibly available during the course of Mittal's offer.
The battle comes to a head in the coming weeks, with Arcelor's annual general meeting of shareholders scheduled for Friday, April 28. The shareholders should soon have the chance to accept or reject Mittal's offer, which is expected to become active the following week.
Chinese steel industry to see restructuring
Chinese steel industry leaders who have attended the fourth China International Steel Congress in Beijing last week have said that a wave of mergers and acquisitions is set to sweep China's steel industry. China's economic authorities have confirmed that the central government will restructure the over-producing industry by limiting production capacity and encouraging domestic steel companies to merge in order to compete on the world market.
China's annual crude steel production capacity is 420 million tons and it exceeded 350 million tons in 2005, exceeding the combined production of the Unites States, Japan, the Republic of Korea and Russia. Last year China's top 10 steel manufacturers produced only 36.89% of the national total, he said. Only eight Chinese companies had an annual production exceeding 10 million tons. The rapid expansion of the industry in the past five years has spawned many medium and small plants.
The China Iron and Steel Association predicts the industry is forming around four regions Anben Steel Group a merger of Ansteel and Benxi Steel in northeast China, a combined Shougang Group and Tangshan Iron and Steel Group in the north, Shanghai Baosteel in east and southeast China and Wuhan Iron and Steel Group in central and southwest China. Mr Xie Qihua, CISA chairman, said both overseas and domestic private investors may participate in the restructuring. But Mr Xie noted that China's industry still lacks concentrated production facilities and is hampered by poor industrial structures, a lack of technical innovation and a preponderance of low production companies.
Mr Wu Xichun, consultant to the CISA, said restructuring would strengthen China's steel industry, and he urged the government to issue its policies as soon as possible
Mr Xu Lejiang GM of Shanghai Baosteel Group Corp said "China's steel industry will see large-scale restructuring in line with the changing international environment and intensified competition."
Mr Wang Tianyi president of Tangshan Iron and Steel Group Co Ltd said mergers and acquisitions are inevitable for China's steel industry.
EBX may leave Puerto Suez
It is reported that Brazilian steel company EBX Siderrgica may remove the two furnaces it installed in Puerto Suez in Bolivia's Santa Cruz department and will not bid for the El Mutn project there.
Mr Juan Manuel Arias CEO of EBX's Bolivian subsidiary MMX told BNamericas that the company made the decision due to its lack of confidence in the current government of Bolivia. "Mr Evo Morales government scared off our investment with its lies and arrogance, making the Brazilian partners uncomfortable and unmotivated to continue participating in this country" said Mr Arias.
Despite Arias' comments, EBX said in a press release Wednesday that "we are still open and are hoping for an open, frank and friendly dialogue so we can continue with the steel project and development plans. But if this is not possible, we will end on good terms with the government." If the company does not reach an agreement, it will study other regions and possibly relocate its project and investments elsewhere, EBX said.
PSMC Privatization - Signing ceremony on April 24
A signing ceremony for sale of 75% stake of Pakistan Steel Mills Corporation is scheduled on Monday April 24, 2006 at 1445 HRS at Privatization Commissions Conference Hall. Pakistans secretary of Privatization Commission Mr Shaikh Ikramullah will sign on behalf of the Government of Pakistan while the authorized representatives of Consortium of Magnitogorsk Iron & Steel Works, TuwairqiSteel Mills and Arif Habib Securities will sign on behalf of their respective groups.
Privatization Commission had received Rs.5.420 billion, 25 % of the total bid, on April 20, 2006 within the stipulated period of 20 days after the issuance of Letter of Acceptance, which was issued after the approval of the Cabinet Committee on Privatization on March 31, 2006. The remaining amount will be deposited within the 60 days after the issuance of LoA.
Arcelor CEO may talk with NLMKs Mr Lisin today
Arcelor's CEO Mr Guy Dolle is due to have talks with Russian billionaire Vladimir Lisin at the sidelines of an industry summit today an Arcelor source has told Reuters.
Arcelor chairman Mr Kinsch told De Tijd "I do not deny that I know Mr Vladimir Lisin. The steel producers meet each another at least once a year. But I will not comment whether there are ongoing talks with Lisin. The rest is speculation. I will not comment."
Speculation has grown that Arcelor will seek to persuade Mr Lisin's NLMK steel group to take a stake in Arcelor, a move that could hinder Mittal Steel's approach.
Cazaly considering legal action against WA Government
It is reported that Cazaly is considering legal action against the West Australian Government after it terminated an exploration license over a rich iron ore Shovelanna prospect.
Cazaly pegged about 40 square kilometers of ground in Western Australia's Pilbara region last year, after Rio Tinto failed to renew its permit in time.
Steel Dynamics' Q1 profits up
Steel Dynamics Inc announced last week that its first quarter profit rose as a result of higher prices for its products and a 24% boost in steel shipments. Net earnings were $76 million as compared with $61 million in the same quarter of 2005.Net sales rose by 17% to $666 million. The average consolidated selling price per ton shipped increased to $631 in the first quarter from $619 in the fourth quarter, largely due to better prices and a favorable mix of products sold. It said the cost of steel scrap per net ton charged increased by $5 from the fourth quarter.
First quarter consolidated shipments of 1.1 million tons were 24% higher than the first quarter of 2005 and 15% higher than the fourth quarter.
"Steel Dynamics had a very strong first quarter which was our second best quarter to date" said President and CEO Mr Keith Busse. "Revenue and net income exceeded our preliminary views principally due to a record volume of steel shipments. Our mills were able to take advantage of the continuing strong market demand for flat-rolled steel and wide-flange beams, increasing production rates and enjoying record shipping volumes" he said.
Lone Star Steel and Apolo Tubos announce marketing alliance
Apolo Tubos e Equipamentos, a subsidiary of Grupo Peixoto de Castro, and Lone Star Technologies operating company Lone Star Steel Company announced that they have entered into a strategic alliance under which Lone Star Steel will be the exclusive marketing representative for Apolo's tubular products in North America.
Mr Paulo Cesar Peixoto de Castro, President of Grupo Peixoto de Castro, said that "This alliance will expand our domestic and international energy related product offerings and market distribution capabilities and give us resources to provide a wider range of products for the domestic energy market, which will enable us to generate improved returns from our tubular business. This agreement leverages our high quality, efficient tubular manufacturing operation with Lone Star's extensive and well-developed, distribution network. We are excited about the opportunities we can jointly create for our companies by working together."
Mr Rhys J Best, Chairman and CEO of Lone Star Technologies, stated, "We are very pleased to have entered into this relationship with Apolo, which will further enhance our ability to provide our customers with the broadest range of energy tubular products available today. Apolo's tubular products complement the sizes and grade ranges in our existing product lines, and their geographic location is excellent to serve the global growth in demand for energy tubular products."
Grupo Peixoto de Castro is a Brazilian holding company, whose principal operating subsidiaries manufacture and distributes refined petroleum derived products, lubricants, chemicals and petrochemicals, steel tubular products and refractory materials. The Group is also active in the banking and real estate industries.
Lone Star Technologies Inc is a holding company whose principal operating subsidiaries manufacture and market oilfield casing, tubing, and line pipe, specialty tubing products, including finned tubes used in a variety of heat recovery applications, and flat rolled steel and other tubular products and services.
Japans poison pill law change likely in next month
Increased powers for Japanese firms to use poison pill takeover defenses after a new company law comes into force next month may mean risks for any investors who are not vigilant over how the new powers are used.
While the new law will also mean benefits for investors such as quarterly dividend payments, analysts say risks lie in the fact that boards may not necessarily take shareholder interests into account when executing poison pills. "The new law is good for Japanese companies and the stock market as long as managements do not abuse it" said Ms Kathy Matsui, chief Japan equity strategist for Goldman Sachs.
Poison pills can hinder hostile bids by granting existing shareholders the right to buy more shares at a lower price.
More than 20 Japanese companies, including top steel maker Nippon Steel have announced plans to adopt poison pill defenses.
Ukrainian Vorskla Steel to build steel mill in Hungary
It is reported that Vorskla Steel AG, a steel company owned by British and Swiss investors with interests in Ukraine, is planning to build a steel company in Hungary.
Vorskla planned to invest Euro 300 million in the project jointly with Ferrexpo Poltava Mining, which is Ukraines largest iron ore pellet producer and a major exporter to Europe.
Bangladesh government rejects proposal for steel mill
It is reported that a Bangladesh governments committee has rejected the proposals of three steel industrial groups to establish a steel plant at the site of now closed state owned Chittagong Steel Mills as Bangladesh Export Processing Zones Authority (Bepza) is establishing a full fledged export processing zone at the site named Karnaphuli EPZ.
The steel groups involved are Abul Khaer Group, PHP Group and Integral Industries Limited. They gave proposals separately to build a modern steel mill on 150 acres of land with an investment of $1 billion.
The state owned Chittagong Steel Mills was closed in 1999, as it was a losing concern. Earlier in February 2005, Bangladesh Steel and Engineering Corporation handed over 74 acres of land of Chittagong Steel Mills to Bepza. It handed over the remaining 148.42 acres of land to Bepza in December 2005.
Karnaphuli EPZ is the eighth exclusive industrial zone in the country sprawling over 222.42 acres of land. It is projected to receive an investment of Tk 360 crore and has an annual export target of Tk 250 crore.
Insteel net earnings up by 47% in Q2
Insteel Industries Inc announced record financial results for the second quarter ended April 1, 2006. Net earnings for the quarter increased to $7.4 million up by 47%, as compared with $5.0 million for the same period during last year. Sales for the second quarter increased to $89 up by 9% million from $81.7 million in the prior year quarter. Shipments for the second quarter increased by 20% while average selling prices decreased by 9% from the prior year levels.
For the six-month period ended April 1, 2006, net earnings increased to $15.1 million up by 48% as compared with $10.2 million for the same period last year. Sales for the six month period increased 10% to $172.5 million from $156.3 million in the prior year period. Shipments for the six month period increased 22% while average selling prices decreased 9% from the prior year levels.
"Insteel's record results for the second quarter were driven by strong demand for our concrete reinforcing products" said Mr HO Woltz III Insteel's president and CEO. "The strengthening in our order book enabled us to ramp up the operating schedules of our manufacturing facilities, favorably impacting productivity levels and unit conversion costs. We continue to focus on the fundamentals of our business in executing our strategy and driving further performance improvements throughout our operations."
Kazakhstan opens Molybdenum enrichment factory
Kazakhstan has opened its first molybdenum enrichment factory in the country's north. The factory will be part of the major Stepnogorsk mining complex, which is managed by the national Kazatomprom, or Kazakh Atomic Industry Company.
The new factory is expected to reach its capacity within the next three months and process 500,000 tons of molybdenum-containing ore annually, Kazatomprom said. Initially, the factory's entire output of molybdenum will be sold abroad, it said.
Kazakhstan possesses the world's sixth largest proven reserves of molybdenum, a metal used as an alloy to strengthen steel and make it less susceptible to rust and corrosion.
Euro Finance plans to steel mill near Kiev
It is reported in local media that Euro Finance Ltd., which controls six scrap yards in Ukraine, is preparing a feasibility study for the construction of a small steel plant in the Kiev region with capacity of 1.5 million to 1.8 million tons of steel per year.
TopTechnip gets pipeline contract from BG Trinidad and Tobago
Technip has been awarded a contract by BG Trinidad and Tobago for the flow lines, risers and umbilicals for the North Coast Marine Area Development offshore Trinidad. The contract includes engineering, procurement, fabrication, installation, and pre commissioning of the insulated riser, flowline and umbilical systems that will connect the Eastern Hibiscus and the Chaconia subsea wells to the Hibiscus Platform. The location is twenty five miles northwest of Trinidad in NCMA Block 01 East Hibiscus and Chaconia reservoirs in 500 feet of water.
The detailed design engineering will be performed by Technip's operations and engineering center in Houston. The high pressure flexible risers will be manufactured by Flexi France one of the Group's flexible pipe plants located in Le Trait IN France while the hydraulic control umbilicals will be manufactured by Technip's UK subsidiary Duco and fabrication of the rigid flowline will take place at Technip's spoolbase in Evanton in UK. The offshore installation phase will use two vessels from Technip's fleet: the Apache will lay the flowlines while the Wellservicer will install the flexible risers and umbilicals and offer diving and ROV support for the completion of the work.
Flowline is the pipe laid on the seabed for the transportation of production or injection fluids linking a sub sea structure like wellhead, template, manifold or riser base to another structure or to a production facility. Flexible riser is a vertical flexible pipeline linking flowlines to surface structures. Umbilical is an assembly of hydraulic hoses which can also include electrical cables or optic fibers, used to control a sub sea structure or ROV from a platform or a vessel.
Technip ranks among the top five corporations in the field of oil, gas and petrochemical engineering, construction and services. Headquartered in Paris, the Group is listed in New York and Paris. The Group's main operations and engineering centers and business units are located in France, Italy, Germany, the UK, Norway, Finland, the Netherlands, the USA, Brazil, Abu-Dhabi, China, India, Malaysia and Australia. In support of its activities, the Group manufactures flexible pipes and umbilicals, and builds offshore platforms in its manufacturing plants and fabrication yards in France, Brazil, UK, USA, Finland and Angola.
