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Tata Steel to bring in cost efficiencies at Neelachal Ispat


MUMBAI: Tata Steel will focus on bringing down costs by as much as 10% over the next two quarters at Neelachal Ispat Nigam (NINL), which the company acquired from the government in July 2022.

NINL’s 1-million-tonne plant at Kalinganagar in Odisha is currently less efficient as compared to other steel-producing locations within the group, and the company is looking to align its efficiency with the rest, Ashish Anupam, vice president for long products at Tata Steel, told ET in an interaction. “While we have started production, there are a lot of areas where cost efficiencies are yet to be taken out, and that is what the team is driving now,” Anupam said.

NINL, which was defunct when acquired by Tata Steel, turned positive at an operating profit level within a year of being taken over, even though it is yet to turn green.

While Tata Steel has spent around Rs 250 crore as ‘startup’ capital expenditure so far on the plant, it has been buying most of the coke required for operations, which is 10-15% costlier as compared to coal.

“We see scope to reduce the cost as the reliability of equipment improves and the coke plant fully ramps up,” Anupam said. The company is currently buying 75% of the coke needed for its operations, while the rest is converted from coal at its site after coke ovens started in September.

NINL, which also has an iron ore mine with 100 million tonnes of reserves and land for further capacity expansion, was acquired by Tata Steel for Rs 12,100 crore. NINL currently produces only billets, which are then rolled into wire rods at other facilities. Tata Steel plans to develop the plant as a hub for long products.


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