The Telegraph
Since 1st March, 1999
Email This Page
Tata Steel in expansion rush

Mumbai, March 24: Tata Steel has lined up investments of Rs 21,500 crore for expansion in the next five to six years. The funding burst comes at a time when demand for steel has galloped to historic highs, fuelling an unprecedented increase in the prices of the key input.

'We already have a steel-making capacity of seven million tonnes,' Ratan Tata told shareholders at an extra-ordinary general meeting held here today to secure approval of raising funds to the extent of Rs 5000 crore. The 7 million tonnes includes 2 million tonnes from NatSteel, the Singapore firm acquired last year.

More than Rs 10,000 crore will be pumped into the Jamshedpur plant, whose capacity will go up from 4 million tonnes. As part of the growth plans, a greenfield steel project will come up in Orissa, a port at Dhamra in the same state and a metallurgical coke plant at Haldia.

At the same time, Tata said the company is evaluating acquisition opportunities in the country and abroad.

On the issue of prices, the company said its decision to charge large customers more from next month was forced by spiralling costs of raw materials in recent months. 'The move to raise prices is painful,' Tata said.

The company said the increase is the first since last year, when it took a historic decision to reduce prices by Rs 2000. Managing director Muthuraman, who had hinted at a 20 per cent increase in the past few weeks, said buyers could have to fork out Rs 5000 more per tonne.

At the meeting earlier in the day, Muthuraman said the company has not taken a call on the instrument for raising funds. 'This is just an enabling resolution,' he said.

On the Orissa venture, Muthuraman said the investment will take time as the infrastructure to support the unit is not available.

'We're losing time and, therefore, the expansion in Jamshedpur is being undertaken at a faster pace. The mining leases in Orissa are factors that pose a risk to the plan,' he added.

Email This Page