Tata Metaliks to shift focus to ductile iron pipes biz

The firm currently operates two business segments- foundry pig iron and DI pipes

Tata Metaliks will eventually become a full-fledged ductile iron (DI) pipe company, said chairman, Koushik Chatterjee, at the company's annual general meeting.

Tata Metaliks now operates two integral business segments, foundry pig iron and DI pipes, post amalgamation of Tata Metaliks DI Pipes Limited. The DI capacity is around 2,00,000 tonnes per annum, while the blast furnace capacity is of 0.5 million tonnes.

The company's annual report mentioned that while pig iron growth was in line with steel production, ductile iron pipe production showed a growth of 11-12 per cent. The growth was largely driven by the government's focus on infrastructure projects in the country including the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and smart city schemes.

Responding to a shareholder's query, Chatterjee said: "In the years to come, this company will become a full-fledged DI pipe company. There is a migration process but it has to be a high-end product that can be differentiated from what is available," he said.

Tata Metaliks has evaluated many projects in the past including an integrated steelmaking project, but Chatterjee made it clear that the expansion would be more focused on DI pipes. The share of revenue from the DI pipes business in Tata Metaliks' overall revenue has increased three-fold over the last six years standing at 60 per cent during 2016-17.

Chatterjee told a shareholder that an integrated steel project was land as well as capital-intensive.

Tata Metaliks will finalise its organic expansion plan in the next 2-3 months. The expansion could be in modules or it could be a bigger alignment, added Chatterjee. 

At present, the firm's manufacturing plant is located at Kharagpur in West Bengal. However, it is yet to be decided whether the expansion would take place at Kharagpur or some other site.