Tata Steel seeks bigger share in auto sector, pins strategy on Odisha plant

Two crucial processing systems at Kalinganagar facility to be commissioned in the next few quarters

Tata Steel is strengthening its new cold rolling milling (CRM) complex in Kalinganagar, Odisha, to serve domestic and world markets and maintain its leadership position in automotive steel, said a senior executive.

A large part of the steel from the complex, which has an annual capacity of 2.2 million tonne (mt) and was commissioned in FY23, is meant for the automotive segment.

Work on continuous annealing and galvanising lines – crucial processing systems for automotive grades of steel – is underway. The systems are expected to be commissioned in the next few quarters.

New cold rolling and galvanising lines are capable of producing steel matching global specifications, said Prabhat Kumar, vice-president marketing and sales (flat products) at Tata Steel. “While our focus will be primarily on the domestic automotive market, the capability exists to meet export requirements.”

To build global capabilities at the Kalinganagar complex, Tata Steel is collaborating with its European counterparts.

“In a manner of speaking, Tata Steel Europe is our technical partner,” said Kumar. “We are working with our units in the Netherlands and the UK to develop steels in the coated space because that’s what Europe largely uses.”

Tata Steel has almost 50 per cent market share in India’s auto grade steel market.

The company makes a small number of exports to a passenger vehicle manufacturer in Malaysia as part of a joint venture with Nippon Steel and Jamshedpur Continuous Annealing and Processing Company. It is a 0.6 mt facility for high-end automotive CR steel at Tata Steel premises in Jamshedpur. CR requirements for the auto segment are also met from other company lines in Jamshedpur, Meramandali, and Sahibabad.

Tata Steel supplies to all major auto original equipment manufacturers and their ancillaries in the country. “We are the largest flat steel supplier in automotive and with the Kalinganagar CRM we expect to further sustain market leadership and address future requirements of our customers including the steel grades being imported into India.”

Tata Steel has a portfolio of 15 mt of flat steel products and of that number 2.5 mt is supplied for automotive businesses. Out of the second number about 34-35 per cent is processed and rest is supplied to automotive OEMs.

India’s auto steel market in flat products is estimated at about 5 mt. To cater to the market, Tata Steel is building a network of service centres around automobile manufacturing hubs Chennai, Sanand, Kalinganagar and Delhi NCR.

Tata Steel’s capital expenditure in FY24 was Rs 18,207 crore. It was focused on 5 mt capacity expansion at Kalinganagar in the upstream and 2.2 mt CRM in downstream.

By the end of next year, Tata Steel would have the entire 2.2 mt CR capacity available. Part of the capacity will serve requirements of other “discerning” customer segments such as pre-engineered buildings, railways, and oil and gas.

STEPPING UP
 

 Large part of steel from new CRM complex at Kalinganagar targeted at automotive segment

 Entire 2.2 million tonnes CR capacity to be available by end of next year

 Mill designed in close collaboration with Tata Steel Europe to cater to domestic and export requirements