Tata BlueScope 3rd unit goes on stream

Company wagers big on low penetration in metal building solutions.

Tata BlueScope Steel, a 50:50 joint venture of Tata Steel and Australia-based BlueScope Steel, sees huge potential in the domestic market in the backdrop of low penetration in metal building solutions and rapid growth of the construction sector in India.

The company plans to cash in on the opportunity with a slew of solutions for building and construction applications.

The company's third roll forming and pre-engineered buildings manufacturing facility at Sriperumbudur, near Chennai went on stream today.

The Chennai facility has been set up as part of the company's plan to set up four manufacturing units in India at a total investment of Rs 1,200 crore.

Its units in Pune and Bhiwadi (Rajasthan) became operational in August and December last year, respectively. The total capacity of these three plants will be about 120,000 tonne a year.

At the inauguration of the Chennai plant, Chetan Tolia, managing director, Tata BlueScope Steel Ltd, India was experiencing a major growth in the construction sector and the country was accounting for about 63 per cent of the steel consumption, while globally the construction sector accounted for about 35 per cent of steel consumption.

Tata BlueScope initially plans to focus on the industrial sector and expects to launch a number of solutions for applications in the commercial and non-commercial sectors by the end of this year or early 2008. The company is targeting foreign companies, which are setting up base in India to sell its steel solutions.

Tolia said in the developed markets like the US, the penetration of metal buildings in the industrial sector was about 70 per cent, 45-50 per cent in the commercial sector and 20-25 per cent in the residential sector.

However, in India, the penetration of metal buildings in three categories "" industrial, commercial and residential "" put together was less than 0.5 per cent.

Kathryn Fagg, chairperson, Tata BlueScope, and president, Asian Business Markets, BlueScope Steel Australia, said the key element in its buildings solutions was the 'speed to market' and this would have tremendous impact on productivity.

The Chennai facility, with a built-up area of 9,500 sq metres on a 10-acre plot, will manufacture light steel structures and roof and wall cladding solutions under the brand name 'Lysaght'. It is also setting up a coated steel manufacturing facility at Jamshedpur at an investment of about Rs 900 crore.