Tata Steel plans to buy more than one steel plant in the country or abroad during this financial year as part of a strategy to increase its production capacity to about seven million tonne (mt) by 2007-08 and 15 mt by 2010.

The company would also step up production of high-end steel for the automobile market and other applications, and launch more branded steel products, the chief spokesperson of Tata Steel told newspersons on Monday.

"We should definitely be acquiring more than one steel company during 2004-05. We are looking at a large number of countries," he said but did not give details.

As part of the strategy, Tata Steel was also exploring towards increasing capacity by setting up greenfield facilities outside Jamshedpur or expanding the existing production capacity.

This year Tata Steel would increase the capacity of its Jamshedpur facility by one mt to five mt. The spokesperson attributed rising sale of steel in the domestic and overseas markets to the plans for higher production.

He said Tata Steel would be able to generate sufficient cash from internal resources and borrowings to fund any possible acquisition.

Demand for steel has increased in the country due to various infrastructure activities, especially road construction and higher sale of automobiles.

The sale of hot-rolled steel jumped 10 per cent during 2003-04 to 10.29 mt, while exports grew by only 2 per cent to 2.89 mt.

The largest domestic steel producer Steel Authority of India Ltd had last month approved a corporate plan to increase production to 20 mt by 2011-12 from the present 12 mt.

On the rising steel prices, the spokesperson said 85 per cent of its production for 2004-05 was tied up in contracts, which left only 15 per cent for trading in the spot market.