PTI reported that TATA Steel, India's second largest private steel marker, has differed with state run SAIL on the need for setting up an equipment manufacturing facility in the country saying enough capacity is lying outside to be sourced from.

Mr H M Nerurkar MD of TATA Steel told PTI that "I am not sure whether we should do be doing it or not... We have issues on land, on raw materials. Who knows at what speed one is going to grow? With these kind of uncertainties, you expect someone to invest in some huge plant and machinery, is not correct.”

Mr Nerurkar, on the other hand, said that "Look, there is a huge manufacturing base available in China. There are equipment manufacturers all over the world and you are not going to put up steel capacity like China at the rate of 40-50 million tonnes per annum (mtpa). Somebody invests like this and then tomorrow you don't put up the capacity, it will be wrong."

Mr C S Verma chairman of SAIL had earlier said as the country would be adding 120 million tonnes capacity by 2020, it would require USD 120 billion investment, including USD 72 billion on plant and machinery. Mr Verma said that "But not even a single manufacturing facility to make machinery for steel-making is here. We need to have some.”

Mr Verma had said that "We don't have equipment. Almost all that is required in an integrated steel plant is being imported. Had there been a manufacturing base in the country, the cost of projects would have come down and we would have the advantage of procuring machinery from indigenous sources.”

According to industry thumb rule, investment to the tune of USD one billion is required for every one million tonne incremental steel capacity addition. Plant and machinery comprises over 60 per cent of the total investment needed.

Incidentally, both the private sector and the PSU are on an expansion spree. The pipeline is even greater.

Source - PTI

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