Tata Steel plans Rs 14,000-crore capex during this fiscal

Mumbai: Steel major Tata Steel Ltd has chalked out a Rs 12,000 crore to Rs 14,000 crore capital expenditure plan to fund expansion of its Kalinganagar plant during the current financial year.

"We have a capex plan of Rs 12,000 crore to Rs 14,000 crore in current fiscal year, which will be mainly funded through internal accruals. The 3 million tonnes (MT) expansion at Kalinganagar will need significant capital," Tata Steel Chairman Cyrus Mistry told shareholders at the company's annual general meeting (AGM) here.

One of the key pillars of the company's strategy is to continue to build capacity in India which is globally competitive. In Jamshedpur, as part of the 2.9 million tonnes per annum expansion, the company achieved almost a million tonnes of additional production and sales during the financial tear 2013-14, Mistry said.

After completion of expansion plans, the company's capacity would increase from the present 9.5 million tonnes to 13 MT, which includes 10 MT capacity of Jamshedpur plant and 3 MT of Kalinganagar unit.

The company is also aggressively pursuing completion of the first phase of its 6 million tonnes per annum greenfield project in Kalinganagar, with stagewise commissioning expected to start by end of financial year 2014-15, Mistry said.

Last month, Tata Steel tapped the US dollar bond market for USD 1.5 billion, marking the first step in plans to refinance approximately USD 5.5 billion of debt and loans. This was part of a mega USD 7 billion debt refinancing initiative for Tata Steel Europe, formerly known as Corus. The company hopes to complete bank financing this year, a company official said.

As part of the strategic divestment, the company had divested its entire stake in its joint venture Dhamra Port Company to Adani Ports and Special Economic Zone, Mistry said.

Commenting on overseas operations, Mistry said, there was a challenging time for steel industry in Europe. Despite volatile raw material prices and challenging market conditions, the business reported an increase in operating margins compared to the previous year.

This is credited to the management's focus on cost management and a strategy for driving product differentiation.

The company has launched over 30 new products during the year in Europe, leading to a 75 percent increase in the volume of new products sold. This is a record for the ongoing new product development programme.

"Our focus on driving market differentiation and cost competitiveness will continue in the future," Mistry said at the AGM.