The company has initiated talks with Tata Motors for supplying auto grade hot roll coils (HRC) for Nano scheduled for launch later this year.
“We have started dialogue Tata Motors for supplying HRC required for its small car Nano. As the company is already an established supplier of steel to Tata Motors, we are hopeful to be part of Nano project too,” Ispat Industries (IIL) executive director (marketing) Vinod Garg said.
IIL is currently meeting roughly 80% of HRC requirements of Tata Motors for its Pune plant. With the addition of Nano, the company would become the single largest domestic steel supplier for Tata Motors.
Apart from IIL, Tata Steel and other global players supply steel to Tata Motors.
Priced at about Rs 1 lakh, the Tata Nano car is set to revolutionalise the automobile industry creating an altogether new segment. Though the car is expected to use high levels of plastics and lighter metals like aluminium, it would also use steel, especially for body and components.
“The HRC requirements for the car may be a mere Rs 200 Kg, half that of other small cars. However, with initial production of about 2,50,000 cars which will soon get doubled, it would provide enough business for steel makers. The HRC would be used for body moulds and other applications by the new car,” a steel industry expert said.
IIL is currently meeting roughly 80% of HRC requirements of Tata Motors for its Pune plant. With the addition of Nano, the company would become the single largest domestic steel supplier for Tata Motors.
Apart from IIL, Tata Steel and other global players supply steel to Tata Motors.
Priced at about Rs 1 lakh, the Tata Nano car is set to revolutionalise the automobile industry creating an altogether new segment. Though the car is expected to use high levels of plastics and lighter metals like aluminium, it would also use steel, especially for body and components.
“The HRC requirements for the car may be a mere Rs 200 Kg, half that of other small cars. However, with initial production of about 2,50,000 cars which will soon get doubled, it would provide enough business for steel makers. The HRC would be used for body moulds and other applications by the new car,” a steel industry expert said.
Rough estimates suggest, that the Nano deal would translate into annual sale of over 50,000 tonne of steel by the steel maker.
IIL produces special grade steel for automobile that is light in weight and is stronger, an ideal combination for Nano. The business opportunity in Nano is part of IIL’s strategy to expand its portfolio of value-added steel for segments like automobile, oil and gas, pipeline and consumer durables.
“We plan to increase the share of value-added steel in company’s product mix from the current 35% to 50% by next fiscal,” Mr Garg said. The company is planning to expand its HRC capacity from the current 3 million tonne (mt) to 5 mt by 2011-12. It is also focusing on development of its power business.
In fact, the company is planning offload its equity in Ispat Energy, a wholly-owned subsidiary, to private equity players and other strategic investors to raise resources for implementing the power plan.
Ispat Energy is currently implementing 110 MW captive power plant for the requirement of company’s steel plant at Dolvi, Maharashtra.
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