| Tisco managing director B. Muthuraman in Calcutta on Thursday. Picture by Kishor Roy Chowdhury
Calcutta, April 3: Tata Iron & Steel Company (Tisco) has decided to raise capacity by one million tonnes to five million tonnes over the next year and a half. The expansion will cost it Rs 1,700 crore, making it the largest investment after the cold-roll mill project. Much of this money will come from internal accruals of the company.
Tisco managing director B. Muthuraman told reporters here today that his company will upgrade its furnace to stretch the limit of its hot-metal production in order to achieve the planned increase in the maximum output level.
Among the additions will be a new sinter plant and a wire rod mill, which will be set up to streamline production processes and add value to the product-mix.
The largest private sector steel company has, for the first time in its history, bettered the target of producing four million tonnes of steel in the last financial year — mainly through a de-bottlenecking exercise.
Muthuraman said capacity will be jacked up once the finishing mill and the hot-metal expansion are completed. The board has already approved the project.
As the plan takes shape, the company has decided to diversify into iron ore mining and approached the governments in Jharkhand and Orissa to take mines on lease. Muthuraman said the goal of selling three million tonnes of iron ore should be met soon.
A senior company executive later told The Telegraph that iron ore would be sold mostly to steel companies at home. There are no plans to export it now.
In the realm of marketing, Tisco has chalked out plans to double its earnings from the sale of branded products. Muthuraman said 100 per cent flat steel, meant for sale through the distributors, will be branded.
“We will net more than Rs 1500 crore from the sale of branded products in the current financial year compared with Rs 750 crore last year. The company will spend about one per cent of its turnover on building up brands like Tiscon, Tata Shaktee and Tata Steelium,” he added.
Behind the optimism is the 8 per cent sales growth in the last financial year, from 3.6 million tonnes in 2001-02 to 3.8 million tonnes in the year ended March 2003. Plans have been drawn up to raise saleable steel output to 4.16 million tonnes from 3.96 million tonnes last year.
In 2002-03, the company achieved 100 per cent production of steel through continuous casting process. It scrapped its bar mill and downed shutters on the Tata Agrico unit, which manufactured agricultural tools.