New Delhi, March 30 (PTI): Tata Steel will start production from its Kalinganagar plant in Odisha from the last quarter of the next fiscal.
“The Kalinganagar project is going on. It will start production from the fourth quarter of next fiscal,” managing director T.V. Narendran said.
The Odisha project is the second integrated unit of the steel major in India after Jamshedpur, where it recently completed the expansion of capacity to 10 million tonnes (mt) per annum.
The Kalinganagar project, which will essentially produce flat products, will have 3mt per annum capacity in the first phase. This will be doubled in the next phase.
Flat products are mainly used in automobile and consumer durables sectors, the demand for which has not increased on the expected lines in the current fiscal because of subdued economic growth.
Narendran, however, is hopeful of demand picking up next fiscal by at least 6 per cent as the economy is projected to grow 5-7 per cent. “Next year’s GDP forecast is 5-7 per cent. Typically, steel demand grows 1.2-1.3 per cent of the GDP growth. If the GDP growth is 5 per cent, I am expecting demand should grow 6 per cent.”
He said the subdued steel consumption growth was because of poor demand from commercial vehicle and construction segments as they were “struggling”. The construction sector accounts for 60 per cent of India’s steel consumption, while automobiles’ contribute around 15 per cent.
“If you look at it, most of the growth in GDP has come from the agriculture segment. That’s why steel demand did not grow much.”