Tata Ryerson eyes Rs2500cr sales

Tata Ryerson, the 50:50 joint venture between Tata Steel and Ryerson Inc of USA, is eyeing a turnover of Rs 2,500 crore by 2010.

At present, Tata Ryerson's revenues from handling 1.2 million tonnes of steel were to the tune of Rs 1,200 crore.

Addressing the media, Sandipan Chakravortty, managing director, Tata Ryerson said, the company had set a target of handling more than two million tonnes of steel by 2010. From two million tonnes, revenues generated would be Rs 2,000-2,500 crore.

Tata Ryerson today announced its proposed facility at Singur for Tata Motors' Nano car factory. Tata Ryerson has been chosen as a sole supplier for the load bearing members. Chakravortty said, parts were being developed in Canada and the operations team would be trained there.

"Such critical roll formed and stretch bent parts are being made for the first time for automobile undercarriage. The total investment planned is Rs 100 crore, which is set to go up further with the success of Nano and its increasing sales," he said.

Tata Ryerson was currently preparing to cater to five lakh Nano cars, which would happen in three years from operations. However, the capacity of the mother plant could be ramped up to seven lakh cars at the same location easily and with some stretching, it could even go up to 10 lakh cars.

Apart from Singur, the other projects in the pipeline were Pantnagar to service vendors for Ace and Tada, for a plate burning and fabrication plant, in partnership with Caterpillar of USA. Chakravortty said, Tata Ryerson's investment would be funded through internal accruals and debts.

However, there were plans of an initial public offering (IPO) eventually. Frank Munoz, chairman, Tata Ryerson said, it would happen eventually and the timeframe was 12-24 months.

He also said that even though the margins in the Singur project would be low, given that it was a people's car, in the long-term it would be accretive to shareholder value.

Chakravortty said, the margins were lower because Tata Ryerson would get a fee while the steel would be bought by Tata Motors. Sources said, each car would require around half a tonne of steel. Some of the steel would be bought from Tata Steel and some could come from Baosteel and Posco.