The Hindu Business Line : Tata Steel in talks for 3-mt integrated plant

Disclosing this here on Tuesday to a team of visiting journalists from Chennai, the Tata Steel Managing Director, Mr B. Muthuraman, said, "We are also negotiating with another State to locate another steel plant." He expected work on the plant to commence "very quickly" and production to begin in three to four years.

However, Mr Muthuraman would not reveal the State or the total cost of the project.

All that he said was the plant would be an integrated one and the company was "moving very fast on our plan."

The proposed 3-mt plant does not form part of Tata Steel's announced plans to increase its production capacity to 15 mt a year by 2010.

This includes increasing capacity at its Jamshedpur plant from 4 mt now to 7.4 mt by August 2008, the acquisition of NatSteel in Singapore, which will bring in another 2 mt, and the proposed 6-mt plant in Orissa.

"We are well on our way to do that (reaching a capacity of 15 mt)," said Mr Muthuraman. "I can see Tata Steel going far beyond 15 mt. From a 2010 perspective, I had said 15 mt."

He said demand for steel in India, South-East Asia and China was expected to grow. If Tata Steel is able to control its cost, capital structure and locations, it will be a "big company."

On funding for the new projects, including a port at Dhamra jointly with Larsen & Toubro, Mr Muthuraman said Tata Steel's debt equity ratio was 0.3 and the company "would like to maintain that or bring it down even further."

A large part of the capital expenditure will come from internal accruals and some from borrowings, whenever necessary.

Tata Steel will look at buying steel plants mostly overseas and is examining possibilities in South-East Asia, China, West Asia and Iran.

It had signed an agreement with the Bangladesh Government to study the possibility of setting up a steel plant using gas.