Calcutta, July 26: Tata Metaliks will set up a 0.5-million-tonne billet-making unit at Kharagpur in Bengal, adjacent to its existing facility.

The company, a subsidiary of Tata Steel, has applied for a 500-acre plot, chairman T. Mukherjee said.

The pre-feasibility study has established that a billet plant of 0.5 million tonnes can be set up at Kharagpur.

Managing director Harsh K. Jha said a feasibility study has been commissioned and the report would be available within 8-10 weeks.

M N Dastur will carry out the detailed feasibility report.

Mukherjee declined to put an investment figure saying it would be known only after the detailed report was made.

?The choice of technology will decide the final investment figure,? Mukherjee added.

Tata Metaliks makes a single product at present. In the long-term, the company wants to manufacture long products.

Billets, a semi-finished steel, is used in the production of structurals and TMT bars used in the construction industry.

For instance, Tata Steel, the group behemoth, had sourced 100,000 tonnes billets last year.

The move by Tata Metaliks to enter steel production does not come as a surprise even as Tata Steel, its promoter, is the largest steel maker in the private sector.

Tata Steel intends to concentrate more into value-added products like cold-rolled items with a higher margin. Two companies, then, could operate in different segments of the value chain.

Tata Metaliks is a low-cost producer of pig iron. The demand for foundry-grade pig iron in the country is robust and the company is going through the upside of the commodity cycle.

It has doubled the capacity to 320,000 tonnes from 163,000 tonnes following the start of the second blast furnace.

Going forward, Tata Metaliks will add fresh capacity of another 320,000 tonnes in the next two to three years. It will explore both greenfield and acquisition opportunities to achieve the target.