Calcutta: Tata Metaliks Ltd. once the loss making subsidiary from the Tata stable is all set to expand its capacity.

Tata Metaliks Ltd. management is reported to have planned to enhance capacity to 250,000 tonnes from 90,000 tonnes. For that purpose, the company will adopt merger and acquisition route. A decision in this regard is expected at the board meeting scheduled this month. According to Tata Metaliks Ltd. managing director H.K. Jha, the strategy will be to go for volume led growth. He said Tata Metaliks Ltd. might also acquire plants from the Howrah region in West Bengal. The company, it seems, will be emphasising more on acquisitins than mervers.

Tata Metaliks Ltd. is currently realigning and modifying its plant units, including enhancement of blast furnace capacity to 1,30,000 tonnes of hot metal per year. It will also enhance power generation capacity to 2.7 mega watt. Total project cost is Rs.8 crores.

The initial expansion target is pegged at 50 per cent. Although optimal capacity for the plant to attain economies of scale are 250,000 tonnes per annum. With TML already capturing 28 per cent of eastern Indian market, the target is to emerge as the strongest power in valued added sponge iron sector. "Our aim is to transform TML into a financially strong, competitively dominant, and technologically superior company", Mr. Jha added.

TML’s expansion spree is due to its high product acceptance. The management expects profits to attain reasonable level once the plant capacity touches the optimal point. "Capacity utilisation last fiscal was 128 per cent and we are running at higher level this year", he said.

Sponge iron from TML commands a premium over its competitors, mainly being marketed in Eastern India it has developed a good demand for value added products. TML’s strategy is to emphasise on service part with schemes like ‘Tatkal’ and ‘Avilamb’

While Tatkal accounts for over 25 per cent of off takes, it ensures instant delivery for certain predetermined quantity. Avilamb, is a variant of Tatkal and provides speedy delivery, without the predetermined quantity part.