NEW DELHI, Apr 21: Tata Steel plans to commission the first phase of its upcoming steel plant at Kalinga Nagar in Odisha by March next year.
“It (the commissioning) will be somewhere between October and March (next year). The first phase will have a capacity of 3.5 million tonnes,” Tata Steel Managing Director H M Nerurkar said here.
The company has invested over Rs 11,000 crore in the new plant, which will produce flat steel products. The company has kept a capex of about Rs 4,000 crore (USD 800 million) this year for the Kalinga Nagar unit.
The second phase, which will increase Kalinga Nagar steel unit’s total production capacity to 5.5 million tonnes per annum (MTPA), will be completed by March 2015, Nerurkar said.
He was speaking to reporters after receiving the Most Admired Company award from management consultancy firm Hay Group and Fortune India magazine yesterday.
Besides, the Tata group firm is also planning to produce around 8 million tonnes of steel in the current year as it will be adding new capacity at its existing unit in Jamshedpur.
“It’s (Jamshedpur expansion) almost complete. Last quarter of this year, we will operate with the increased capacity,” Nerurkar said.
He added that the company will announce its borrowing plan for the current year in next two months.
“We have not yet firmed up that. There are lots of options…In next two months, we will finalise it. With Odisha coming up and Jamshedpur expansion, we will require lots of funds. Either during next month results or a month after that, we will announce it,” Nerurkar said.
The company had earlier said that it has kept a capex of USD 2.5 billion (about Rs 12,500 crore) for the current fiscal on its existing and expansion activities.
Of this, the company will be spending USD 800 million on Kalinga Nagar unit, while its Tata Steel Europe would get about USD 600 million and the new 2.9 million tonnes unit at Jamshedpur will get about USD 400-500 million.
Talking about the steel demand, he said it is expected to grow by 8 per cent this year in India, while in Europe, it would be around 2-3 per cent.
He added that the Tata group firm will invest about 400-500 million pounds this year and over the next three financial years on its European unit to continue to upgrade its facilities there.
Due to sluggish demand in Europe, the company expects to run its European units at 80-85 per cent capacity in current fiscal, he said.
“We expect European steel demand to grow at around 2 percent to 3 percent this financial year, so it is unlikely that our plants would operate at full capacity,” Nerurkar said. *(PTI)
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