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Tata Steel to Expand Kalinganagar to 8 MTPA, Invest 23,500 Cr.

Tata Steel plans for 2.7 times of the current capacity expansion of Kalinganagar* Plant in Odisha, India. The expansion shall be scaling up the facility’s capacity to 8 MTPA from the current 3 MTPA.

The groundbreaking ceremony for Phase -II Kalinganagar project was done by Hon’ble Chief Minister of Odisha Mr. Naveen Patnaik in an event during ‘Make in Odisha Conclave 2018’.

The 5 MTPA Kalinganagar Steel Brownfield Expansion

Tata Steel logo

For the 5 MTPA Steel Plant expansion plan Tata Steel has pledged a Capex of Rs. 23,500 Cr. and is expected to complete the project within 48 months. The Capex is back loaded with less than 25% of spending envisaged in the first two years. This Phase II brownfield expansion includes investments in raw material capacity expansion, upstream and mid-stream facilities, infrastructure and downstream facilities including a  2.2 MTPA cold rolling mill complex.

In the press-release of the company on 12th Nov 2018, Mr TV Narendran, CEO & MD, Tata Steel said “The envisaged product mix will consolidate Tata Steel’s presence in the automotive and high end quality product market segments”. He also mentioned that the Kalinganagar facility is expected to be one of the lowest-cost producers of steel in the world.

Kalinganagar plant phase -I had commenced commercial production in May 2016 and thereon has attained it’s rated capacity of 3 MTPA. The steel maker has commercialized 188 grades at the facility. Presently at the plant auto, lifting & excavation, LPG, high carbon, pre-engineered buidings (PEBs) and tube grades are the key capabilities in product segments.

Tata’s Mutually Beneficial Accociation with Odisha

Tata Steel Kalinganagar

Tata Group has over 100 years of association with the sate of Odisha. In the above referred press release by the company, Mr. N Chandrasekaran, Chairman, Tata Group mentioned that after Phase-II expansion of Tata Steel Kalinganagar Tata Group’s investment in the state will cross Rs 1,00,000 Cr.

Tata Steel for Odisha – Going Local

He also announced a new 500 bed multi – specialty hospital at Gopalpur, Ganjam district, Odisha.

Kalinganagar plant by April 18 had provided employment opportunities for 21955 people, 59.62 % of which are from the state and engaged directly by Tata Steel. Further, 80.71 % of the total contractors workforce also belong to the state.

The company is also encouraging development of the local population by providing employment training and by sending local youths for skill development training to reputed institutes. 358 youths have been imparted skills training in the past 4 years.

Overview of Tata Steel

As of 31st March 2018, the annual crude steel capacity of Tata steel group was 27.5 MTPA.  With operations in 26 countries and a commercial presence in over 50 countries. The group had consolidated turnover of Rs. 133,016 Cr. in FY 18, spread in 5 continents.

Tata steel is also aiming an installed capacity of 30 MTPA by 2025  from the existing 18.5 MTPA.  The total capacity of Tata Steel India operations following the expansion will be 23.6 MTPA, including exsisting capacity of 10 MTPA at Jamshedpur, 3 MTPA at Kalinganagar and 5.6 MTPA of Tata Steel BSL.

Indian Steel market

Indian Steel Industry Pie-Chart
April 2017- Jan 2018: Steel Production by Inida’s Top 6 Steel Producing Companies in India

According to Joint Plant Committee – JPC  India’s top six steel firms – public sector Steel Authority of India (SAIL) and Rashtriya Ispat Nigam Ltd (RINL), and private sector firms Tata Steel, Essar, JSW and JSPL have contributed 58 % crude steel out of 84.420 MT during April 17 to January 18 in the country. These six companies have produced 48.718 MT and 35.70 MT came from others.

* Kalinganagar is a planned industrial and modern town in Jaipur district of coastal Odisha.

This article is written with some inputs from Business Standard.