Major Indian steel producer Tata Steel has announced its decision to suspend all capacity expansions, including those for hot rolled coil (HRC) production, under the Kalinganagar Phase II project, and to focus only on the cold rolling mill complex and pellet plan.
Initially, the Kalinganagar plant capacities, which total 3 million mt of mainly HRC per year at the moment, were planned to increase by 5 million mt to 8 million mt per year. But now “we will focus on the cold rolling mill and pellet plant, both of which we are targeting to commission in the next financial year. All the other facilities for now will be looked at the year after,” CEO and managing director of Tata Steel Limited Thachat Viswanath Narendran said during a press conference. The decision was made “in light of the slowdown in the market.” The new pellet plant will help to reduce costs of flat steel production at the Kalinganagar plant, while higher CRC output from the new line will increase the share of value-added products in the company’s portfolio.
Taking into account expected local demand improvement in the next Indian fiscal year, when the consumption is forecast to go up by about 5-6 percent, Tata Steel is going to increase sales by efficient production at existing and newly purchased plants and there are no plans for any new acquisitions. The company has already reached the annual run rate of 5 million mt at Bhushan late in the 2019 calendar year, versus 3 million mt which the plant had before acquisition by Tata Steel. “We also have the option to reduce our exports because we've done significant exports this year,” Thachat Viswanath Narendran mentioned.