Tata Steel planning to deintegrate production

Tata Steel, the country's largest private sector steel company, is planning a de-integrated production process as a part of its expansion plan to reach an annual capacity of 15 million tonne by 2010.

A de-integrated process will reduce the company's production cost by $25-$50 a tonne of steel.

The company will also be looking out for commercial partnerships both in the domestic as well as overseas markets for facilitating this production structure.

Under the de-integrated system, Tata Steel will be producing only semi-finished products such as billets and slabs at its main production facilities, while the products will be finished near the market.

The company will save costs on transportation of iron and coal, along with certain operational benefits.

T Mukherjee, deputy managing director, Tata Steel, said, "As part of our 15 million tonne per annum production target, we are soon planning to introduce de-integration of the steel value chain. We will be looking out for commercial partnerships to facilitate this kind of production process."

However, he declined to specify the nature of the partnerships, saying that they could be "all round partnerships".

Tata Steel is undergoing an expansion phase which will increase its rated capacity to 5 million tonne per annum. The company has announced another expansion project of 2.5 million tonne, which is expected to go on stream by 2006-07.

The company has also planned a to put up a sponge iron plant at its existing facilities at Jamshedpur. The sponge iron plant will have a production capacity of 3 lakh tonne per annum.

Along with this, the company is also planning to set up facilities for producing coated-steel products.