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July 19, 2001
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Money > Business Headlines > Report July 19, 2001 |
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Tata Steel shuts down Orissa ferro-chrome unitBS Corporate Bureau Tata Steel, the Tata group flagship, has shut down its ferro-chrome unit in Bamnipal, Orissa, after the company's world steel dynamics' management decided that operations there have become "unviable". Managing director J J Irani said: "With international ferro-chrome prices crashing, we decided that operations at the plant would no longer be viable." The plant has a 50,000 tonne per annum capacity. Power costs -- a major component of cost of production -- were as much as five times the international rates, Irani said. Other Tata Steel officials said the move was only temporary, and the unit could be re-started later if the industry scenario improves. "As global ferro-chrome prices were higher last year, the business was contributing positively to the bottomline. But all those profits have now evaporated," Irani said. However, the Tatas plan to build on the ferro-chrome business in the long term. The company was planning to set up a 120,000 tonne unit in Australia, but is now considering South Africa as an alternative. "We could end up with a better power cost structure in South Africa than in Australia. In South Africa, we have been offered a tariff linked to international ferro-chrome prices. This would be a safeguard against any fluctuation in prices," Irani said. South Africa has the world's largest chrome ore reserves and could obviate the need to import chrome ore from Orissa, as the plan is in for the proposed plant in Australia, analysts said. The company has, however, entered into a joint venture agreement with Martrade of Germany to develop a captive berth at the Haldia port in West Bengal. The company's managing director-designate B Muthuraman said the captive berth, at a project cost of Rs 350 million, will have the capacity to handle three million tonne of cargo annually. Tata Steel imports significant quantities of coal and exports various steel products, which necessitated a captive port, Muthuraman said. Powered by YOU MAY ALSO WANT TO READ:
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