SA-India joint venture builds R400m steel plant at Coega - published 18 May 2012
Agni Steels SA plant is joint venture between Agni Steels and Nelson Mandela Bay empowerment consortium MARK ALLIX Published: 2012/05/18 06:39:37 PM
THREE Port Elizabeth businessmen have partnered with one of the biggest steel manufacturers in India to set up a R400m steel plant already being built in the Coega industrial development zone, the Coega Development Corporation said on Friday.
The Agni Steels SA plant is a joint venture between Agni Steels and a Nelson Mandela Bay empowerment consortium. The Industrial Development Corporation holds a 10% stake in the venture.
Coega said it would be the first wholly black-owned company to operate a steel smelting facility in the Eastern Cape, with a further 10% of shareholding reserved for a workers’ trust.
The venture is expected to create 800 jobs, with downstream benefits for local industry.
"We started building three or four months ago," Ayanda Vilakazi, marketing and communications manager at Coega, said on Friday.
He said the plant would start producing mild steel billets for export to India and other African countries by June next year. Production would then be ramped up in phases, including converting the billets into reinforced steel for domestic consumption and starting exports into other parts of the continent.
Agni Steels was started by brothers Hassan and Sharaz Khan and partner Dhiroshan Moodley after they identified the need for a domestic steel producer to beneficiate scrap metals being exported from South Africa.
The group said it chose Coega for its location and world-class infrastructure.
"(We are giving) direct equity to the workers to enhance their sense of responsibility. So, the harder we all work, the more we benefit," Hassan Khan said on Friday.
Agni Steels has been operating for 20 years in the Indian steel industry and was the first manufacturer of mild steel billets there to receive International Organisation for Standardisation certification.
The plant at Coega would use 10000 tons of scrap metal a month during the first phase of operations, doubling to 20000 tons thereafter.
It would be the first mini steel smelter and mill in the Eastern Cape, and the first project in the metals cluster planned for Coega’s Zone 6.