File picture

Three Port Elizabeth-based businessmen have “broken new ground” by becoming the first wholly black-owned company to operate a steel melting facility in the Eastern Cape, according to Ayanda Vilakazi, marketing and communications manager at Coega.

In “the first partnership of its kind in SA”, the businessmen have partnered with one of India's biggest steel manufacturers to set up AGNI Steel SA, Vilakazi said.

The company is in the process of building a R400 million steel plant in Zone six of the Coega Industrial Development Zone.

“The plant is set to have a positive impact on the Nelson Mandela Bay and the Eastern Cape as a whole, as 800 jobs will be created once the plant is fully operational and all phases have been completed.”

It would also have downstream benefits for the local industry, Vilakazi said.

The South African arm of AGNI Steel was started by brothers Hassan and Sharaz Khan and partner Dhiroshan Moodley, who decided to explore untapped opportunities in the metal industries in SA and India.

AGNI Steel also identified the need for a local steel producer in light of the amount of scrap which was being shipped out of SA for processing before being brought back into the country.

The project is a joint venture between AGNI Steel and a local Nelson Mandela Bay BEE consortium, with the Industrial Development Corporation having a 10% stake and a further 10% being reserved for a workers' trust.

The project will be implemented in three phases over a five-year period and the plant will be operational within nine months to a year, with the steel billets produced being exported to India and other African countries during the first phase of the project.

Once all three phases are completed, AGNI Steels SA will use modern drilling mill technology to convert the steels billets produced into reinforced steel for local consumption and exports into Africa.

AGNI Steel is one of the the leading secondary steel manufacturers in the South of India and has built a reputation for the quality of their steel products under the brand “AGNI TMT” in that region.

The company has been operating for the past 20 years in the steel industry and was the first secondary steel manufacturer of mild steel billets in India to receive ISO certification.

The plant at Coega will use 10,000 tonnes of scrap metal every month during the first phase and this would double to 20,000 tonnes in the second phase.

“Instead of the scrap metal being exported it will be locally beneficiated thereby adding value to locally available resources that are simply exported currently.”

“In addition, new technology will be brought to SA which will further job creation and skills transfer to local South Africans,” Vilakazi said.

Programmes that involve local employees being taken to India for training prior to commissioning are being investigated.

AGNI Steel SA will be the first mini steel-melting unit to be commissioned in the industrial history of the Eastern Cape and will be the first project in the metals cluster planned for Zone six. - I-Net Bridge