Tata Steel MD: India unlikely to achieve ambitious 2012 steel production target
Sharad Matade 16 February 2011

As demand for steel grows in India, the steel ministry had set a target of 120 million tonnes per annum, by end 2012; Tata Steel more than doubles Q3 profit

India is not likely to achieve its ambitious plans to produce 120 million tonne per annum (mtpa) of steel by the end of 2012, a top Tata Steel official has said.

"I don't think we will produce 120mtpa by the end of 2012, from the current production capacity of 67mtpa, as we are still a net importer," Hemant Nerurkar, managing director, Tata Steel, told Moneylife on Tuesday.

The Indian steel ministry aims to produce 120mtpa by the end of 2012, to become the second largest steel producer in the world. According to the World Steel Association, the country is today the world's fifth largest steel producer.

Yesterday, Tata Steel, the world's seventh largest steel producer, reported an impressive growth of 112% in consolidated net profit for the third quarter ended December, on the back of growing demand and high product prices. The company (including its European unit Corus) recorded a net profit of Rs1,003 crore in the quarter from the Rs473 crore in the previous corresponding period.

The company's consolidated net sales grew by around 10% to Rs28,606 crore, over the Rs26,067 crore last year. The company's Indian operations did better than the European operations in the third quarter. The Indian operations reported sales of Rs7,397 crore, up 16% from a year earlier, while the European unit's sales stood Rs17,940 crore, up 7% from a year earlier.

The Tata Steel stock price gained nearly 4.5% to Rs644.15 on the Bombay Stock Exchange today, compared with the benchmark Sensex which stayed more or less flat.

"India's demand for steel is expected to grow by 10%-12% this year as demand from the auto sector is surging. We aim to provide one million tonnes of auto products for the auto industry," Mr Nerurkar said. "We are on track to achieve our volume target of 6.4 million tonnes for this financial year."

About steel prices, the Tata Steel managing director said, "Prices will be determined by international trends and we will be in a position to pass on the price hikes to our customers."

In 2011-2012, Tata Steel will focus on debottlenecking its India operations to meet the growing demand. "To maintain our market share we will focus on debottlenecking our Indian operations until the expansion programme at the Jamshedpur plant is completed," Mr Nerurkar said.

The Jamshedpur programme is expected to be completed by December 2012. Last month, Tata Steel raised Rs3,477 crore through a follow-on public offer. The company intends to spend Rs1,875 crore for the Jamshedpur expansion programme and Rs1,090 crore will be used to pay the redemption of some maturing redeemable non-convertible debentures.

The company has started ground work for its 6 million tonnes capacity Orissa project and it is looking for mines which will provide iron ore for at least for 30 years.

Comments
Shadi Katyal
1 decade ago
I doubt if India can ever reach these goals and must remain dependent on the world because our new CZAR Mr. Ramesh will see to it that no industry which might have some implications of environment will not be allowed.We seen his decision on mines and other projects.
Here is a nation which Nehru called such plants as new temples though he also denied TATA to increase the capacity as he went for Russian modle where PSU were important.
Unless we take the Permit Raj road blocks away and let the industry develop on its own without hands tied,India can never reach thos3e goals.
Does our minister rectognise the need of the nation?
Ravindra Shetye
Replied to Shadi Katyal comment 1 decade ago
Mr. Jawaharlal Nehru built the Temples.

Mr Jairam Ramesh is demolishing the temples.

MOEF is going overboard. I am sure when the Adivasi Children grow up, they will blame the Government that they have been kept backward. The same way for the Scheduled Castes in India.
shadi katyal
Replied to Ravindra Shetye comment 1 decade ago
I fully agree with you but our problems are manyfold as we have bleeding hearts who are misleading the poor people to keep a hold on them.
It is not only Czar Raamesh but some NGO and groups like Narbada andolan who rather keep their leadership and fight in name of Adivasis but keep them poor. I for one have failed to understand how stopping progress and inability to provide jobs and eduction will bring India at par with any development nation
We also forget that our population is multiplying and are we going to be 21st century labour provider to rest of the world since we are being forced to not develop the nation.
While there is a dark cloud hanging over the continent due to diesel burning of generators and cow dung as fuel, we are not allowing to openh coal mines to supply power to the people.
What kind of convulated thinking we have or do we wish to keep poverty for ever.
Ravindra Shetye
1 decade ago
With everyone, mainly MOEF creating hurdles in the way of development of all sorts including the Beutiful cities like Lavasa, Steel Plant like POSCO, new airport for the Growth of Mumbai and so many other bright examples what else is to be expected?

Possibly back to the Stone Age?
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