Steel boom draws Tata Metaliks

Tata Metaliks is exploring the possibility of diversifying into steel making and will take a decision in the next few months.

Addressing a press conference to announce the commissioning of the second blast furnace, T Mukherjee, chairman of Tata Metaliks Ltd (TML), said the company was considering the option of manufacturing billets.

The company was weighing the option of sourcing sponge iron from Tata Sponge Iron Ltd (TSIL) and producing billets using the electric arc furnace route.

TSIL is located at Bilaipada near Joda, in the Keonjhar district of Orissa.

Mukherjee said, the market for billets was good.

In fact, Tata Steel had to buy 100,000 tonne of billets from other manufacturers.

The plan for diversification was expected to be finalised over the next few months, and would then be placed before the board of directors for approval.

In tandem with the growth plans, Mukherjee requested West Bengal's chief minister Buddhadeb Bhattacharya for more land.

The chief minister, who was inaugurating the expanded TML plant here today, agreed and asked the company to submit its request and proposal to the government to secure additional land.

A blast furnace was inaugurated at the TML plant by the chief minister. At present, Tata Metaliks plant was spread over 198 acres.

However, Mukherjee did not specify how much additional land would be required.

The commissioning of the second blast furnace would augment the capacity of the TML plant to 320,000 tonne of pig iron, which would translate into revenues in excess of Rs 500 crore.

The capital expenditure on the new blast furnace was around Rs 50 crore. Mukherjee said the enhanced capacity could exceed 360,000 tonne if the plant was run well.

Mukherjee said the company would consider a fresh hike in pig iron capacity as it would continue to be the company's core product.

Tata Metaliks was also exploring possibilities in backward linkages. Mukherjee said.

The company has applied for coal and iron ore blocks in Jharkhand and Orissa.

Diversification of Tata Metaliks would run parallel to the company's inorganic growth plans.

The company was eyeing acquisitions in the domestic market.

Mukherjee refused to divulge any information on the acquisition front but said that the company was not planning any acquisition in the steel space.