Cutting Edge

Calcutta, Jan. 8: Tata Metaliks Ltd plans to diversify into auto casting and ductile iron pipe making after having acquired a pig iron unit from Usha Ispat. This makes the firm the world’s largest manufacturer of pig iron.

Tata Metaliks, a subsidiary of Tata Steel, India’s largest private sector steel mill, is in search of a foreign collaborator for its proposed foray into ductile iron pipe manufacturing.

The company will make auto castings and ductile iron pipes, which are extensively used for distribution of drinking water, in the newly acquired Redi plant in Maharashtra. Tata Metaliks paid Rs 115 crore for buying out the 3,20,000-tonne unit from Stressed Assets Stabilisation Fund and the acquisition helps the company double its capacity.

“We now plan to invest another Rs 35 crore to start operations in its three blast furnaces in full swing from 2006 itself,” a company executive said.

Simultaneously, the Tata firm will go in for forward integration with auto casting and DI pipe making. However, investments in these areas are not yet finalised.

Tata Metaliks was in search for an acquisition in the western region for a long time in order to establish its presence close to the burgeoning automobile industry in the southern and western parts of the country. Its present unit in Kharagpur, Bengal, caters to the foundry industry in the eastern region.

The company is also looking at expansion in the east by way of steel making. It is now in the process of acquiring land for putting up a billet making unit. Billets, a semifinished steel, is used in the production of structurals and TMT bars used in the construction industry.