By Nageshwar Patnaik in Bhubaneswar, September 28, 2016 : Tata Steel has no plans to set up third green field steel plant in the country in near future, the steel major’s managing director (India & South East Asia) T V Narendran told a group of reporter here on Wednesday.

“Building new capacity is not immediately on the horizon. We have already invested Rs 25,000 crore for the green field steel plant at Kalinganagar at a difficult time. Greenfield expansion is more expansive while brown field is more sensitive. Jamshedpur (Tata Steel’s mother plant) has 10-million-tonne steelmaking capacity. Kalinganagar is 3 million. We have got green signal to add one more million ton to Jamshedpur plant”, Narendran said.

He made it clear that Tata Steel would go for brown field expansion programme in a phased manner. “Our Immediate focus will be to get Kalinganagar to ramp up fast. In Kalinganagar, we have 2,000 acres. We are in the process of getting another 1,000 acres more. We are on track to produce more than a million tonnes. Our original plan was a million. We said we will move towards million and a half. I think we are heading towards that. So far the plant has been commissioned quite well and we are happy with the ramp up”, he remarked replying to a query.

The Steel major also is also looking at the state-owned Odisha Mining Corporation [OMC] to source its iron ore partly for Kalinganagar plant. “As far as OMC is concerned, it gives us an option to buy from OMC which we do exercise once in a while because sometimes it is also driven by a need to manage the logistics. OMC mine is 20-30 kilometres from Kalinganagar and today the market price of iron ore is not very different from the cost of mining iron ore. So we play that option depending on the economics of it.

On exporting steel products manufactured at the Kalinganagar unit, Narendran said, “Our Kalinganagar plant has already started exports of Ferroshots and hot rolled coils. Tata Steel’s Jamshedpur plant is exporting to South East Asian countries. The Kalinganagar unit will also export products to South East Asian countries”, the Tata Steel MD said.

Narendran hopes to reach breakeven from Kalinganagar steel operations by the end of this fiscal, the time it expects to reach the first phase rated capacity of three million tonne per annum (mtpa), he said.

Earlier this month, Tata Steel flagged off its first consignment of hot rolled steel export rake to Nepal from its Kalinganagar plant.

Narendran appears unfazed by the challenges faced by the domestic steel industry and, particularly, his company. He is optimistic about demand picking up in India.

“The demand in India is certainly growing and India is one of the more exciting markets from a demand growth point of view. We have always said that the cost position of the Indian steel industry is very good. Indian steel industry is very competitively positioned in a market which is growing in demand, which has some support in form of import duties or anti-dumping duties or safeguard duties. So the profitability of the industry will certainly improve”, Tata Steel MD said.

On the issue of further extension of minimum import price [MIP] of steel, Narendran said, it is helpful for the industry, but the prices in India will be determined by the demand-supply situation. “It certainly gives the industry some respite against cheap imports. The industry is very appreciative of this support from the government.

About further extension of MIP after October 30, the steel maker said that the government is looking at it more comprehensively. They have multiple options. There is anti-dumping duty, safeguard duty, MIP. It does not matter what is there and what is not there as long as the problem is looked at holistically, which the government is doing, and comes out with a solution which addresses the concerns of the industry.