The Hindu Business Line : Tata Steel to go in for Rs 1 lakh-crore capacity expansion

WITH global steel demand expected to touch 1,000 million tonnes in the next 25 years at an annual growth rate of around 3-4 per cent, Tata Steel has firmed up plans to augment its steel making capacity to 33-34 mt per annum (mtpa) by 2015 at an estimated investment of Rs 100,000 crore.

Stating this at a news conference here today, Mr B. Muthuraman, Managing Director of Tata Steel, said the capacity of the existing plant at Jamshedpur would be augmented from the present 5 mtpa to 10 mtpa at an investment of Rs 11,000 crore. Besides, a 12-mtpa greenfield integrated steel plant would be set up in the Manoharpur or Chandil area of Jharkhand at an estimated investment of Rs 42,000 crore. Two other greenfield steel plants of 6 mtpa and 5 million tpa capacity would be set up at Orissa and Chhattisgarh, respectively.

These investments would be funded from the company's internal resources and debt. The Jharkhand Government has committed to make available iron ore reserves for meeting the company's raw material requirements, he said.

Mr Muthuraman said Tata Steel's plans to acquire a 2 mtpa steel plant in South East Asia was expected to be finalised within the next 4-5 months. Due diligence exercises in this regard were currently on.

Tata Steel has also firmed up plans to set up a 50:50 joint venture with BlueScope of Australia for providing total construction solutions. A 250 tpa colour coated sheets manufacturing facility would be set up at Jamshedpur. The total investment in the proposed joint venture is estimated to be Rs 1,500 crore.

The steel major was also going ahead with its proposed titanium project that would be located at Tuticorin in Tamil Nadu.

Feasibility studies in this regard were over and the company was in the process of acquiring land for the purpose.

According to Mr Muthuraman, the growth in the domestic steel sector is expected to be around 3-4 per cent a year in the next 25 years.

In the near-to-medium term, steel prices were likely to come down. "Steel prices are high and they must come down. At current levels, the prices are not healthy for the steel industry. However, on account of increased input costs, I expect prices in the next decade to be higher than in the last decade," he said.

Steel prices during the second half of the current fiscal are expected to rule a "little higher" than in the first half. With the steel industry on a firm growth path, Tata Steel was focused on addressing the issue of skilled manpower availability in the years ahead.

Towards this end, the company has signed two memoranda of understanding with the Jharkhand Government for co-operation in human resources development through polytechnics and industrial training institutes.

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