Roland Berger seeks steel plant site in Dharwad, India

27 August 2015 2 min. read
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As part of its further expansion, the global steel titan Arcelor-Mittal has signed a memorandum of understanding with the Steel Authority of India to construct a ‘Cold Rolling Mill Downstream Finishing Facility’. Roland Berger, Arcelor-Mittal’s technical advisor, is on the lookout for a suitable location for the new plant, which will have a production capacity of 1.5 lakh tonnes (150,000 tons) and cost Rs 5,000 crore ($782 million).

In a bid to find a site for the giant steel plant, Prathamesh Choudhary and Juben Sarkar from strategy consulting firm Roland Berger  contacted the Karnataka Chamber of Commerce and Industry (KCCI) to find a suitable location in the vast Indian landscape that provides both the infrastructure needs as well as proximity to an automotive cluster that represents demand.

“For setting up the steel plant, Arcelor-Mittal requires 300 acres of land in a rectangular shape. We have informed the consultancy about the availability of land belonging to the KIADB near Mummigatti in Dharwad and at Gamanagatti Industrial Area second stage near Hubballi,” states Vasant Ladawa, KCCI President.

Although the approximately 1.3 km by 0.7 km piece of land required for the project is potentially available in the vicinity of Tata Motors, Tata Marcopolo, Tata Telcon and various small automotive companies, several issues remain surrounding the government’s commitment to introducing heavy industry to the area. As it stands, the local government has delayed providing information about the land availability, soil strength, and water quality, among others. 

Roland Berger seeks steel plant site in Dharwad, India

“We urged the government to take the issue seriously and to ensure there’s no repetition of the case of Hero Motocorp, which we lost. This steel plant will boost the development of the Mumbai-Karnataka region. The Chief Minister has instructed Industries and Commerce Department Commissioner Gourav Gupta to take suitable steps,” adds Ladawa.

The Chief Minister and the Industries Minister, however, state that one of the reasons for a delayed response appears to be that no proposal for setting up the plant in the Dharwad region has been received. Even though no such formal proposal has been received, the local government has been informed, according to Ladawa: “A KCCI delegation met Chief Minister Siddaramaiah and District in-charge Minister Dinesh Gundu Rao in Bengaluru on June 24 to apprise them of the matter. Additional Chief Secretary (Industries) Ratnaprabha K. too was apprised of it. During the Belagavi session, we met Mr. Gundu Rao again to stress the need for taking forward the process.” 

The breakdown of communications has led to a ‘communications gap’ and the resultant concern that – in light of no informal interest shown – the project might be moved to another region unless all parties are able to bring themselves to the same page and formally investigate the merits and disadvantages of such a project for the region.