Jamshedpur: Tata Ryerson Ltd., a 50:50 venture between Ryerson-Tull of the US and Tata Steel-is set to commission a rs.40 crore precision cold rolled (CR) steel service center at its hot roll (HR) processing facility at Ranjangaon, Pune, in August this year.

This would be the company's second cold rolled steel service centre in the country. Its first such unit, capable of handling 3.2 lakh tonne of CR steel annually and located adjacent to Tata Steel's 1.2 million tonne (mt) cold rolling mill (CRM) here, was inaugurated in July last year.

Tata ryerson sources said the new Pune facility too would use Tata Steel's cold rolled coils produced here.

The company has estimated a requirement of over 1.6 lakh tonne per annum (tpa) by the automobile, appliance and control panel manufacturers in an around the Pune region.

"These customer segments have very high quality and service expectations and there is a need for a world class service centre in that region to meet these requirements," a Tata Ryerson source said.

"The cold processing segment has a much wider market than the processed hot rolled steel one, as it encompasses the automobile and appliance manufacturers, including tube, compressor, control panel, etc." Tata Ryerson managing director Alak Saha had said here after the inauguration of the Jamshedpur facility last year.

Tata Ryerson, now in its fourth year of operations in India, is into the business of supplying steel to its customers' specifications after processing it at its service centres. It expects consumption of service-centre processed steel to go up to around 25 per cent in the next five years, from 5 per cent now. In the US, consumption of steel passing through service centres is estimated to be around 40 per cent to 50 per cent of the country's total consumption.

Sources said Tata Ryerson has, after a detailed evaluation of the proposal and discussions with Tata Steel on the Pune CR processing facility, entered into a 10-year "processing contract" with the latter. The company's fresh investment of Rs. 40 crore at Pune would empower it with a 1,560mm wide slitting line, a 1.560mm wide cut-to-length line and a 800mm wide cut-to-length line for processing CR coils for the automobile, white goods and control panel segments of the nearby markets.

To meet the stringent quality requirements of the specific industries it is targetting, Tata Ryerson has gone for imported processing lines. Company sources said while orders for the slitting line have been placed with Pro Eco, Canada, orders for the cut-to-length lines have been placed with Red Bud Industries US.

The company plans in the near future to set up a few more steel processing centres at Delhi and Chennai, in that order. It has, however, still not decided whether they would be based on CR or HR steel. Tata Ryerson also has a HR steel processing unit at Bara here.

With the completion of its investment in the CR processing centre at Pune, the company would have invested Rs.120 crore at its units at Jamshedpur and Pune, the source said.

Tata Ryerson's list of customers includes Hyundai Motors, Godrej GE, ITW Signode, Wheels India, Tata Engineering, Mahindra & Mahindra, Bajaj Auto, Hindustan Motors, Premier Auto etc.