Tata Steel’s capex is likely to reach Rs9,000 crore in the current fiscal ending March, the company revealed in a conference call with the Indian media. Capital allocation will be focused on the company’s pellet plant and cold-rolling mills in India, apart from its European operations.
Tata Steel’s pellet plant aims to lower the cost of production and its cold rolling mill seeks to add value to the product mix.
The firm successfully bid for the Saruabil and Kamarda cold rolled mines, which will enable it to meet ferro chrome demand over the medium term.
The company has invested approximately Rs1,367 crore in its India operations, including Rs935 crore in its Kalinganagar plant in Odisha, part of which is dedicated to pellet production.
On the basis of market response and the company’s targets on its balance sheet, Tata Steel will commence phase II of the Kalinganagar expansion, with an annual capacity of 8mn mt, up from the prior capacity of 3mn mt. Company officials cited market conditions over the next few months as being a key driver of capital allocation for the year ahead.
During the second quarter, ending September 2019, the company revised the initial capex plan of Rs12,000 crore to Rs8,000 crore.
At the end of the December quarter (Q3), the company had spent Rs2,777 crore, pushing total capital expenditure in the current fiscal to Rs 7,762crore.
Tata Steel’s consolidated net loss was Rs1,228 crore in the December-ending quarter, partly due to low steel demand in Europe.
Tata Steel’s consolidated India crude steel annual production capacity stood at 19.6mn mt, with manufacturing facilities in Jamshedpur in Jharkhand; Kalinganagar and Dhenkanal in Odisha; Sahibabad in Uttar Pradesh, and Khopoli in Maharashtra.