Tata Steel yet to freeze final capacity of Kalinganagar plant

Tata Steel is yet to take a call on the ultimate capacity of its greenfield steel project at Kalinganagar, about 100 km from Bhubaneswar.

After commissioning the first phase of the steel mill with a rated capacity of three million tonnes per annum (mtpa), the steel maker has been dithering on its final capacity that it projects at six or eight mtpa.

“It could either be six million tonnes or eight million tonnes, though the possibility of eight million tonne is higher. It depends on some of the technical factors, we are still streamlining. Very soon, the proposal will go to the board”, said T V Narendran, managing director (India & South East Asia), Tata Steel.

He declined to put a figure on future investments at Kalinganagar as the company’s board was yet to approve the second phase expansion.

Asked on the ease of credit flow to the steel industry, Narendran said, “Tata Steel has always been a good customer of the banks”.

On ECBs (external commercial borrowings) as an option to fund second phase expansion, said, “We will take a call. As of now, we don’t have a problem with bank credit.”

Tata Steel’s Kalinganagar steel unit started commercial operations in May 2016. But, it has not reached its peak production capacity of three mtpa.

“We have reached 95 per cent of the capacity. We are already producing 230,000240,000 every month, so, we are almost there”, said Narendran.

The plant is producing HR (hot rolled) coils and Tata Ferroshots (granulated pig iron). Last fiscal, Tata Steel exported around one million tonnes of finished steel products from the Kalinganagar mill, inclusive of HR coils and Ferroshots. The South East Asian markets were the key recipients. As a product, Tata Ferroshots has been received well in the international markets, but it is more demand driven, implying that the steel maker does not roll out this product consistently.

The first phase of manufacturing would focus entirely on making flat steel products that find widespread applications in automotives and white goods. In fact, Tata Steel is keen on projecting its Kalinganagar facility as the hub for specialised automotive alloys.

The plant with a state-ofthe art HSM is effectively positioned to churn out import substitute automotive alloys of wider dimensions. This is expected to overcome the limitations of the Jamshedpur steel mill and help Tata Steel grab a higher share of the auto components market.