Tata Steel has chalked out a Rs 12,000-14,000-crore capital expenditure plan to fund expansion of its Kalinganagar plant in 2014-15. The company’s capacity would increase from the current 9.5 million tones (MT) to 13 MT after the expansion.
“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 MT expansion at Kalinganagar will need significant capital,” Tata Steel chairman Cyrus Mistry told shareholders at the company’s annual general meeting.
The company continues to build capacity in India. In Jamshedpur, as part of the 2.9 MT per annum expansion, the company achieved almost 1MT of additional production and sales during 2013-14, Mistry said.
Last month, the company tapped the US dollar bond market for $1.5 billion, marking the first step in plans to refinance approximately $5.5 billion of debt and loans. This was part of a mega $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.