Tata Steel- L&T port in Dhamra

Tata Steel and engineering major Larsen & Toubro (L&T) have zeroed in on Dhamra as the location for their proposed port project in Orissa. The project is likely to be a 50:50 joint venture.

A senior L&T executive said, "We are setting up a port at Dhamra in Orissa in partnership with Tata Steel. The cost of the project has been pegged at around Rs 1,200 crore."

It is learnt that the companies have chosen Dhamra due to locational advantages. The proposed joint venture with the Tata group firm marks the revival of the port project at Dhamra for L&T.

The Rs 9,500 L&T had earlier planned to build the project in partnership with Precious Shipping of Thailand and Stevedoring Services of America. Since the project was plagued with delays, the two foreign companies decided against participating in it.

Last month Tata Steel managing director B Muthuraman had told Business Standard that the two companies had recently decided to set up a port in Orissa jointly which would be operational in three years time.

The decision to build the port comes at a time when the Rs 9,000 crore Tata Steel is planning to hike its present production capacity of four million tonne to 7.5 million tonne in the next three years. It is also working on a long-term plan to ramp up production to 15 million tonne by the end of this decade.

To enhance its iron ore exports, Tata Steel had announced a Rs 75 crore plan to push exports to China, South Korea and Japan.

The setting up of the port is expected to result in substantial cost savings for the steel firm.

Tata Steel is the second low-cost steel producer. The company at present imports around five million tonne of steel. This includes import of coal and limestone.

The company is also planning to export iron ore and steel.

This cargo is expected to swell to 11 million tonne when the capacity of the plant is ramped up to a 7.5 million plant.