The factory was initially located at Porto Novo, now known as Parangipettai, in South Arcot District of Tamil Nadu but was later moved due to fuel shortage to Beypore on the west coast of India.

His first encounter with Indian methods of iron and steel making was prompted when a friend in northern India sought a shot for hunting guns.

In 1818 J. M. Heath of the East India Company was stationed at Porto Novo and he proposed that if European processes were used, good quality steel could be produced from the ores obtained from Salem and that this production could be of importance to Imperial power.

[19] Heath was supported by Thomas Munro and Alexander and Co. of Calcutta and in 1825 he resigned from the Madras civil service and decided to establish an iron plant.

[20] He had chosen the location as it was close to Salem where there was iron ore and it was connected by the Vellar river and the Khan Sahib canal (which had been opened in 1854) to the Kollidam.

He then proposed to the Governor of Madras, Sir Frederick Adam in 1824 that a better factory could be established with government assistance to obtain ores and fuel.

[21] Furnaces, forges and rolling mills were initially built at Porto Novo but after the 1855 it moved to Beypore on the west coast where the first Bessemer converters were installed.

[20][22][23] Heath had examined ideas by Rene Antoine Ferchault de Reaumur and Benjamin Huntsman and made trials of steel making with manganese.