Tata Steel to revive production capacity at Corus

Tata Steel today said its European subsidiary Corus will be able to meet full capacity utilisation by the end of the current fiscal, riding on revival in global demand.

Corus, which had cut production capacity of its mills by as much as 50 per cent amid the demand slump last year, has currently revived the utilisation of its mills to 80 per cent.

"In October, the capacity utilisation had touched 80 per cent. It should be 85 per cent by the end of November and 100 per cent by the end of this financial year," Tata Steel Vice-Chairman B Muthuraman said on the sidelines of CII Steel Summit here.

Corus produces about 20 million tonnes of steel per annum.

"Demand is coming back in the west," he added.

Globally, steel producers have started reviving their production capacities with the rise in demand for their products. ArcelorMittal had revived the capacity utilisation of its mills to about 61 per cent in the past three months and aims to take it up to 70 per cent in the ongoing quarter.

However, the world's largest steel maker had warned against the over production at Chinese still mills and the resultant influx of cheap steel goods, especially in the South Asian market.

But, Muthuraman said the production by Chinese steel mills is only meant to feed its domestic market and there is no threat of dumping of cheap steel items.

"Chinese steel production will meet its internal demand, which is high," he added.

Asked if steel prices will follow the upward demand trend and shoot up, Muthuraman said that "in the long run prices are likely to remain stable".

On Tata Steel's ongoing expansion projects, he said, "Expansion work at Tata Steel is going fine."

Tata Steel is enhancing production capacity to 10 million tonnes per annum (MTPA) at its Jamshedpur plant at an estimated investment of Rs 12,000 crore by January-March 2010-11. At present, the plant has a capacity to produce 6.8 million tonnes of steel annually.

In addition to the existing plant, the company has also proposed setting up of mega steel plants in Jharkhand, Orissa and Chhattisgarh.