Tata Metaliks targets Rs 1,000 cr turnover

This Tata Steel associate now focuses on downstream businesses

Tata Metaliks has set a target of achieving a turnover of Rs 1,000 crore by 2006-07, an increase of 212 per cent from the current level, by foraying into new businesses.

The company hopes to reach its target by entering downstream businesses. Tata Metaliks was in the process of charting its roadmap and was weighing manufacture of billet and alloy steel varieties complementary to Tata Steel's product range, which was moving up the value chain. Tata Steel happens to be the parent company of Tata Metaliks.

The move to diversify was part of Tata Metaliks' conscious effort to graduate from a one-product company.

The company has mentioned in its annual report that castings was another area that was under consideration.

Castings capacities in the developed world were being replaced by new capacities in China and India. Automobile castings were being increasingly outsourced from India by international automobile giants and Tata Metaliks believed that it possessed a rich insight into the business.

For the purpose of implementing business extensions, Tata Metaliks has already requested the West Bengal government to allot land nearby location of the plant at Kharagpur.

At present, Tata Metaliks plant was spread over 260 acres and it was understood that the company had indicated an additional requirement of around 500 acres.

The company recognised that while considerable value was created in core manufacturing, the business value would need to be created upstream and downstream for long-term competitiveness.

The company was evaluating both the extensions. Tata Metaliks was looking at backward integration through acquisition of iron ore mines and coal blocks for which it has applied for government permission.

This would help the company save costs and also enhance its business flexibility to play either the-end product or the intermediate products markets.

However, pig iron would continue to be the core product. The output was expected to touch 3.20 lakh tonne in 2005-06 from the present level of 1.63 lakh tonne. The newly installed blast furnace would make this possible.

The company installed the new blast furnace in 13 months against a prevailing industry benchmark of 16-18 months.

---

Pluralism

• Tata Metaliks may manufacture billet and alloy steel varieties
• It is also considering castings as another area for diversification