After Bhushan Steel buy, Tata Steel looks at Odisha expansion

Tata Steel, which is in the process of ramping up its capacity through acquisitions as well as organic route to meet the surging demand, is in talks with manufacturers who have approached the steelmaker for its metal.

The firm, which is adding capacities worth Rs 60,000 crore, last week completed the purchase of debt-ridden Bhushan Steel under the Insolvency and Bankruptcy Code mechanism, which will add another 5.6 million tonne per annum (mtpa) to its production capacity of 13 mtpa.

"We are in discussion with Tata Steel for an industrial park at Kalinganagar (in Odisha). The idea is that if we can get the mother plant on board, it would be able to provide the hot metal to the units which would come up within the park. We are now reaching out to downstream companies who have given us suggestions and we are working out the details and we will then discuss them with Tata Steel," Sanjeev Chopra, principal secretary, industries, Odisha, told DNA Money.

Tata Steel has also announced the expansion of its Kalinganagar plant at Odisha, which will add another five million tonne capacity over the next four years.

And there are plans to expand the capacity of Bhushan Steel, which the Tata firm bought for Rs 36,400 crore for production units spread over Odisha, Maharashtra and UP.

Tata Steel MD and CEO T V Narendran had recently indicated that Bhushan's capacity can be taken to about 8 million tonne in future.

"Tata Steel is expanding Kalinganagar from 3 mtpa to 8 mtpa while Bhushan Steel has just been taken over by the Tatas. And Tata Steel would ramp up Bhushan Steel's capacity once it stabilises the operations," said Chopra, who was in the city to hold talks with prospective investors for the Kalinganagar National Investment and Manufacturing Zone.

The investment and manufacturing zone, to be spread over 163 square kilometre, is coming up at a time when the steel sector is in an upswing, encouraging companies like Tata Steel to go for relentless capacity expansion, thereby creating a need for user industry to flourish and consume the surge in output.

After achieving 100% capacity utilisation for commercial saleable steel production in December quarter to 3 mtpa installed capacity at Kalinganagar in December, Tata Steel simultaneously approved a further expansion to 8 million tonne at an additional capital outlay of Rs 23,500 crore.

"Land at the park would be given at concessional rate while we would subsidise the infrastructure within the industrial park to the extent of 50% while 20% of the land would have mixed-use approval to promote township where there would be commercial usage also," Chopra said.