Tisco plans finishing ventures

Global firms evince interest

Tata Steel is looking at partnerships with international steel companies to set up steel finishing facilities globally. The partnerships could be in the form of joint ventures or strategic alliances.

Tata Steel has made presentations about a de-integrated steel production process and many large international steel players have evinced an interest to partner with the company, sources close to the development said.

However, no concrete decision has been taken as yet on any partnerships. Sources, however, declined to name the international steel players who have shown interest.

"The partnerships could be in the form of joint ventures, which would either set up steel finishing facilities or acquire existing orphan mills and ramp up the facilities there," sources added. The company could also acquire some such finishing facilities, they said.

As per the de-integrated production concept, Tata Steel will produce only semi-finished products such as billets, slabs and hot-rolled coils at its steel making facility in Jamshedpur, while the products will be finished near the market where it will be sold.

A split production system would enable savings of $50 per tonne for Tata Steel, as there would be savings in freight costs.

"Not only will there be cost savings, but it will also expand the company's reach into many more international markets," sources said.

Tata Steel's de-integrated production process is part of its expansion plan to reach an annual capacity of 15 million tonne by 2010.

The company is currently undergoing an expansion which will increase its rated capacity to 5 million tonne per annum.

The company has announced another expansion project of 2.5 million tonne, which is expected to go on stream by 2006-07.