Tata Steel eyes deals for limestone in Dubai

Tata Steel, the country's largest private sector steel company, is scouting for limestone opportunities in Dubai.

The company recently entered into a joint venture to procure limestone from Thailand. Sources linked to the plans told Business Standard, "Tata Steel is currently on the lookout for captive limestone reserves in Dubai. The move is directed towards reducing raw material costs and ensuring availability in the long term."

Earlier this year, Tata Steel had formed a 49:51 joint venture with Thai-based Unistretch to source limestone from Thailand.

The limestone from the captive resource will provide the company with a direct benefit of $2 per tonne of limestone usage.

A steel sector analyst said the company imports around eight lakh tonnes of limestone annually, with most of it coming from west Asia.

The Thai joint venture is expected to meet almost 30 per cent of the company's total requirement.

The move is targeted towards supporting the raw material requirement of Tata Steel, which is looking at establishing its presence in the international market.

The company has already entered the steel markets in China, Singapore, Philippines and Vietnam through the acquisition of the Singapore-based NatSteel.

Tata Steel also has a ferro chrome project in South Africa, and a wire rod making facility in Sri Lanka.

The company has planned to setup a 2.4 million tonne steel plant in Bangladesh, and is currently conducting a feasibility study to finalise a location.

Tata Steel has also announced a 6 million tonne steel project in Duburi, Orissa. The company has envisaged an investment of Rs 15,000 crore for the project, which will be upgraded to a capacity of 10 million tonne in the second phase.

The company is in the process of increasing its capacity at its Jamshedpur plant to 5 million tonne, which will be further enhanced to 7.4 million tonne by 2007.

Nearly 35 per cent of the present requirement is to be met by way of import from Thailand. The Thai limestone, it is felt, will be of superior quality.