Economy

Steel companies ramp up tinplate capacity with ₹2,500-cr investments

Suresh P Iyengar Mumbai | Updated on September 14, 2021

See steady increase in demand

Amid the raging controversy over tinplate imports, existing producers JSW Steel and Tata Steel are increasing capacity with an investment of about ₹2,500 crore.

JSW Steel Coated, a subsidiary of JSW Steel, plans to increase capacity by 2.80 lakh tonnes (lt) to 6.30 lt by next June with an investment of ₹700 crore.

Similarly, market leader Tinplate Company of India, a subsidiary of Tata Steel, will put up an additional capacity of 3 lt with an estimated investment of ₹1,800 crore. At present, Tinplate Company has a capacity of 3.79 lt while two plants of JSW Steel Coated at Ludhiana and Tarapur have cumulative production capacity of 2.30 lt.

Approved in August, Tinplate Company expansion is expected to go on stream in about three years.

Seshagiri Rao, Joint Managing Director, JSW Steel, told Business Line that tinplate expansion of 30,000 tonne at Ludhiana will be commissioned by January and another 2.50 lt will go on stream by June.

“When we took over Vallabh Tinplate five years back it had a capacity of 30,000-40,000 tonnes per year, now it has been increased to over one lakh tonne and we had set up a modern tinplate plant of 2.50 lt. We will be investing another ₹700 crore to double the capacity,” he added.

The addition of fresh capacity by both the leading tinplate manufacturers come at a time when imports have come to a standstill after the government made it mandatory for exporting companies to register for Bureau of Indian Standard certification.

The demand for tinplate has been increasing steadily from food packaging industry with the ensuing festival season and revival of overall economy.

Defective imports

Though can manufacturers have been claiming tinplate short supply after the BIS certification was made mandatory, tinplate companies claimed that they are operating at 50-60 per cent capacity utilisation due to import of defective tinplate which are about 25-30 per cent cheaper than the prime material.

“We are not against imports but shipments of defective materials which are rejected by other countries is a worrying factor as 70 per cent of the material is used for food packaging,” said a steel company official.

With the fall in steel prices, tinplate prices will also come down, he said.

Of 2.05 lt of tinplate imports last fiscal, about 1.55 lt was defective while in FY20 imports were at 2.80 lt of which 2.22 lt was defective, he added.

Published on September 14, 2021

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