The Hindu Business Line : Sustained rise in steel use seen

Mr B. Muthuraman, Managing Director, Tata Steel, addressing the annual production press conference, flanked by Mr A.N. Singh, Deputy Managing Director - Corporate Services, and Dr T. Mukherjee, Deputy Managing Director - Steel, in Kolkata on Tuesday. — Parth Sanyal

Kolkata , April 6

THE Managing Director of Tata Steel, Mr B. Muthuraman, is optimistic of a sustained increase in domestic steel consumption in the years ahead.

Addressing a news conference here today, Mr Muthuraman said all "macro-economic factors indicate that India is at the take-off stage" and the need of the hour was to create conditions for setting up new capacities in the steel sector. As such, it would be imperative to concentrate on infrastructure creation such as roads, ports, etc. The domestic demand for increased consumption of steel would provide the impetus for setting up new capacities, he said.

In this context, he mentioned China, which he said had embarked upon the liberalisation process 12-13 years before India did. "The China of 1991 was slightly worse than the India of 2004. Any economic reforms process takes time to settle down. India's growth rate now is likely to be around 7-8 per cent and there is great potential for domestic steel consumption to accelerate," he said, even as he cautioned industry against setting up capacities "blindly".

Speaking on the company's performance in 2003-04, Mr Muthuraman said that during the year, Tata Steel produced 4.47 million tonnes of hot metal, 4.22 million tonnes of crude steel and 4.09 million tonnes of saleable steel. Thanks to a richer product mix and better operational efficiency, Tata Steel would achieve record sales and profits. While the company became EVA (Economic Value Added) Positive for the first time in 2002-03, 2003-04 was the first year when the company became EVA Positive taking into account the average prices of the last five years. Last fiscal, 27 per cent of the sales turnover was accounted for by sales of branded products.

Mr Muthuraman said Tata Steel was hopeful of producing 15 million tonnes of steel by 2010. Towards this end, the company was open to the idea of acquisitions both in India and abroad. The setting up of greenfield projects in the east coast of the country was also on the agenda. Half of the targeted 15 million tonnes of steel by 2010 would be produced in Jamshedpur.

As part of its plan to augment production at the Jamshedpur plant by one million tonnes, the `G' blast furnace, whose capacity stands at 1.2 million tonnes now, would be replaced by a furnace with a capacity of 1.8 million tonnes. The expansion project would entail an investment of Rs 2,000 crore, which would be raised from internal accruals. Much of the new facility would be ready by the end of fiscal 2004-05 while the entire project would be ready by September 2005.