Tata Ryerson to sell finished long products
Business Standard — March 14, 2005

Tata Ryerson, the 50:50 joint venture between Tata Steel and Ryerson Tull, will be transforming the way steel long products are sold in the country by setting up the first automated rebar processing centre in the country and offering long products finished and sold by the piece tailormade to the customer’s requirement. Sandipan Chakraborty, managing director Tata Ryerson said, the company would be setting up the first unit at Faridabad.

“This will change the way steel is sold to the construction sector, as buyers would not have to buy steel by the tonne and would instead be buying it as specific pieces, each measured, cut, bent and finished to the requirement of the structure”, he said. “Buyers would save large are on site currently required for steel storage, handling and finishing, besides saving on manpower for these jobs, so overall the cost to the customer would be the same if not lower than at present”, he added.

The first unit would go onstream after July 2005. In later phases, such centres would be set up in the western and southern parts of the country. Initially, the capacity of the unit would be around 3,000 tonne per month. It would be scaled upto 10,000 tonne per month, over the next two years. The processing centre would produce customised cut and bent rebars of the customer-preferred dimension, form and shape.

The business group would primary focus on sales to major construction sector entities which construct large structures like dams, bridges, flyovers and high-quality, large-format buildings as a value added service. In flat products, Tata Ryerson has a capacity of 0.8 million tonne. Chakraborty said the vision of the company was to take up its capacity to two million tonne by 2010. At present, the company’s existing processing facilities at Jamshedpur and Pune can handle over one million tonne of flat products in a year.

The company is looking at closing the financial year with a turnover in excess of Rs 500 crore. In 2003-04, Tata Ryerson achieved a turnover of Rs 357 crore with a profit before tax of Rs 25 crore. Chakraborty said the company was eyeing a turnover of Rs 700 crore in the next financial year. Out of this, around Rs 40-50 crore would come from long products. Tata Ryerson was also planning to step into neighbouring countries like Nepal, Bangladesh and Sri Lanka.

A decision on the issue would be taken in the next financial year. However, Chakraborty clarified that the immediate objective of the company would be to service the domestic market, which was growing at fast pace. Currently, Tata Steel directly or indirectly contributed around 70 per cent towards the company’s turnover. Efforts would be made to bring Tata Steel’s share down to 60 per cent over the next three years.

Tata Ryerson also services companies like Essar Steel, Ispat Industries, Steel Authority of India Ltd (SAIL), Jindal group. Chakraborty said, “Tata Ryerson has working arrangements with SAIL and Ispat.” In developed countries, more than 50 per cent of steel was processed through steel service centres before reaching customers for further use.