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Tata Steel aims to start work on the ground on its expansion at the greenfield Kalinganagar plant in Odisha by April this year. The steel company has pledged Rs 23,500 crore investment to ramp up crude steel capacity of this project to eight million tonnes per annum (mtpa) from three mtpa now.
“We are now in the process of finalising work contracts and selection of technology suppliers. The company believes ground level activity on Kalinganagar expansion should take off latest in April this year”, said a company executive.
After full ramp-up to eight million tonnes, Tata Steel hopes the Kalinganagar plant with its diversified and enriched product mix to fetch better margins and be more cost-effective than the Jamshedpur facility.
“Ramp up has its own advantages. First, it would offer the Kalinganagar project the economies of scale. That apart, the plant is close to ports and mines and is designed in such a way that it cuts operating costs”, he said.
The project configuration and costs includes investments in raw material capacity expansion, upstream and midstream facilities, infrastructure and downstream facilities including a cold rolling mill complex. The expansion is expected to be completed in 48 months. The key takeaway of Tata Steel’s second phase expansion is the establishment of a cold rolling mill to exclusively cater to the need of the automotive sector.
At Kalinganagar, the steel company is looking to tap emerging, value-added products and segments like construction & projects, pre-engineered buildings, oil & gas, lifting and excavation and shipbuilding. The new segments are expected to account for 30 per cent of total sales from the Kalinganagar plant.
Presently, the company’s Kalinganagar facility is servicing segments like HR (Hot Rolled) commercial, LPG cylinders, precision tubes and Railways. The superior Hot Strip Mill (HSM) at Kalinganagar compared to Jamshedpur, both in width and tensile strength, is capable of addressing to an array of customer requirements. The mill has developed high-end application products such as HS 800, DP 600, API X70/X80 and S355 for lifting & excavation (L&E) segment.
After achieving the ramp-up to three million tonnes at Kalinganagar, Tata Steel has gained entry into the PEB (pre-engineered) segment and also conducted successful trials and commenced supplies to global leaders in L&E space. Also, the company has approvals from a leading oil marketing company for the supply of API grade steel. The steelmaker has also established itself as a major player in the large diameter pipeline segment through Kalinganagar.