Kalin­gana­gar to be low­er­cost steel pro­ducer


Resource Digest - - RESOURCE DIGEST -

Tata Steel’s Kalin­gana­gar(ja­jpur district here) project is set to be­come a lower-cost steel-pro­duc­ing cen­tre com­pared to the com­pany’s other in­te­grated steel fa­cil­ity at Jamshed­pur. “Be­tween Jamshed­pur and Kalin­gana­gar, the lat­ter will even­tu­ally be­come a lower-cost pro­ducer of steel be­cause of the com­par­a­tive ad­van­tage of lo­gis­tics though in the ini­tial days, it has to deal with high de­pre­ci­a­tion cost for be­ing a new plant,” said T V Naren­dran, man­ag­ing di­rec­tor of Tata Steel.

“Our aim is to take the per-em­ployee out­put to over 2,000 tonnes of steel to com­pete with global lead­ers like Posco, whose per-em­ployee steel out­put stands at 2,300 tonnes,” he added.

At present, Tata Steel’s Jamshed­pur plant, old­est steel mill in the coun­try, com­pares un­favourably with some of the new-age steel plants in the pri­vate sec­tor from a cost point of view. With a ca­pac­ity to pro­duce 10 mil­lion tonnes per an­num (mtpa) of steel, it has a work force of 37,000. JSW, which pro­duces 14.3 mt steel an­nu­ally, has a work­force of 12,271 em­ploy­ees.

The sav­ing on lo­gis­tics at Kalin­gana­garis thanks to its prox­im­ity to the Paradip. Kalin­gana­garis only 118 km from Paradip, whereas the dis­tance be­tween Jamshed­pur and its near­est port, Kolkata, is 270 km. This is in ad­di­tion to the ad­van­tages it en­joys for be­ing a new-age plant that gives it scope for ju­di­cious de­ploy­ment of per­son­nel and use of modern tech­nol­ogy.

The ousted chair­man of Tata Sons, Cyrus Mistry, has taken credit for com­mis­sion­ing of the Kalin­gana­gar project in his let­ter to the board mem­bers. “On the more pos­i­tive side, Kalin­gana­gar, the largest do­mes­tic cap­i­tal in­vest­ment of the group was com­pleted, over­com­ing sig­nif­i­cant ob­sta­cles that had left the project in doubt pre­vi­ously,” he wrote. Mistry’s claims are not far from the re­al­ity con­sid­er­ing all the has­sles the com­pany faced in putting up the project at Kalin­gana­gar, which took more than a decade to be op­er­a­tional after sign­ing of the mem­o­ran­dum of un­der­stand­ing due to pro­tracted ag­i­ta­tion by the lo­cals over land ac­qui­si­tion and other bot­tle­necks.

Mistry’s re­moval as chair­man of Tata Sons is un­likely to have any ef­fect on the Kalin­gana­garpro­ject, which is march­ing to­ward achiev­ing a ca­pac­ity of three mtpa in the first phase.

Tata Steel plans to add six mtpa to its ex­ist­ing 13 mtpa ca­pac­ity across two at Jamshed­pur and Kalin­gana­garover the next few years. Out of the pro­posed ex­pan­sion, while one mtpa ca­pac­ity could be added to the 10 mtpa steel mill at Jamshed­pur, the ca­pac­ity Kalin­gana­garsteel project would be in­creased by five mtpa.

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