• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Port Info

• Ships in Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Santanu Sanyal

Jamshedpur , Jan. 28

COME June, Tata Steel will have commissioned in Vijayawada its first advanced stockpoint to reach its products in the southern region in a cost-effective way and also to take advantage of the VAT due to be in force from April 1.

Spread over more than 20 acres and built at an estimated cost of Rs 20 crore, the stockpoint, to be known as hub in the company's parlance, will have an annual throughput of 40,000 tonnes by 2007-08.

The Vijayawada hub will be the first in a series of four such hubs Tata Steel proposes to launch all over the country as part of its plan to rationalise distribution and transportation of finished products. The other identified locations are New Delhi, Nagpur and either Kolkata or Jamshedpur. Under the hub-and-spoke system, the company will reach its products by rail to these hubs for onward movement by road to different consumers. In other words, the hubs will also act as transhipment points.

Besides the hub-and-spoke system, the other features of rationalisation include drastic reduction in the number of existing stockpoints and greater reliance on rail as a means of transportation of finished products than before. In the past one year, Tata Steel reduced the number of stockpoints from 65 (also including those of the tube and wire divisions) to 19, to be further brought down to seven including three of the existing stockpoints at Guwahati, Hubli and Faridabad. There are three service centres, one each at southern, northern and western regions, which are not exactly stockpoints but linked to the company's external processing agencies and these centres too will be left untouched.

In the past couple of years, Tata Steel stepped up the rail movement of finished products by 20 per cent, to be upped further as transportation on steel wheels is considered the preferred option vis-à-vis other modes, particularly transportation on rubber tyres, in terms of cost, capacity and efficiency.

For point-to-point movement, the railways, it is felt, is much cheaper than roadways.

There will be larger containerisation of high-value products, particularly cold-rolled products, even for domestic movement and the involvement of the Container Corporation of India will increase.

The hub-and-spoke system, which combines rail and road networks instead of either rail or road, will play a critical role in the company's future scheme to provide an effective delivery system, more so in view of the shift in product-mix more in favour of low-volume high-value varieties.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Refrigerator majors told to state gross, net capacities in ads

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line