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| Edited By: Sumit Moitra |Source: DNA |Updated: Nov 23, 2018, 05:45 AM IST
Anand Sen, president, steel business and total quality management at Tata Steel, who oversees the Kalinganagar project, was instrumental in developing some of the value-added products, including applications in automobiles and had spearheaded the redesigning of the distribution strategy. He is now involved in integrating Bhushan Steel with the company. Sen tells Sumit Moitra how this integration is being worked out and discusses some of the challenges facing the sector.
By and large, except in some areas, Bhushan Steel has been a quality asset with good parentage. That said, there are some projects within Bhushan which have to be completed. Also, the plant was starved of maintenance and spares for the last three-four years, during which the company went through troubled times. And, of course, the management style was different, which is now being aligned. Putting Tata Steel’s systems and processes and transparencies is the first level of uplift. Being Bhushan’s consultant also, we had sent in a team to look at the safety aspects. It was followed by HR personnel coming in to conduct training sessions, which was then followed by the maintenance and technical people joining in. We have placed about 30-40 people at Bhushan in a way that they influence the outcome. We can say the integration is a sort of hands-off, but deeply engaging process for us. There are also many things that Tata Steel also needs to learn from Bhushan. It’s not a one-way traffic. We are giving Bhushan the highest opportunity to succeed without trading on their independence. That’s the story of integration so far, and a reasonably good story.
There is the coke oven that remained incomplete for a long period of time. While the essential things like the blast furnace or a hot strip mill is there, there are some small things that have to be fixed like the setting up a cooling pit for hot-metals. Then there are some portions of the rail infrastructure that needs to be completed, some areas of logistics within the plant and material storage. These are engineering challenges as the cooling pit isn’t there because of lack of space. Also, the engineering intervention is taking place in a live plant. In fact, there is a whole list about 50 things that our technical team has identified that need to be fixed and cost, ranging from, say Rs 5 crore to Rs 500 crore. All these are necessary to tune the operations to optimise the plant outcome in terms of productivity, the throughput and the safety practices.
The good news is Bhushan brings in a lot of complementary assets that Tata Steel didn’t have and which creates access to markets which we didn’t address. Bhushan got hardened and tempered lines and we weren’t present in that market. They also have API pipe products which we don’t have. They also have a whole range of colour coated steel products. While colour coated steel for the construction sector is available (which Tata Steel makes), such variants for appliances and consumer durable goods sector is not easily available.
Theoretically, we are so far away from the world average in terms of per capita consumption that there can easily be a headroom for 200-300 million tonne of fresh capacity. And today, we are just 100 million tonne capacity nation. So for the next 10 years at least, we can keep adding capacities, a minimum of two steel plants a year. That said, we need to set up sensible capacities that are environment-friendly and technologically advanced.
Availability of land would continue to remain an issue. Mistakes made in the earlier cycle should be avoided as some ground realities like environmental laws have changed. Being a cyclical industry, every player should have the capability to rid out a down phase.
