With steel prices finally looking up after a dismal period, Tata Iron and Steel Company Ltd (Tisco) has announced a Rs 1,995-crore capacity expansion in crude steel. Tisco board on Wednesday approved in principle a scheme for installing balancing facilities for increasing the production of crude steel from the current level of four million tonne per annum (mtpa) to a level of five million tonne per annum at an estimated cost of Rs 1,995 crore. The company informed The Stock Exchange, Mumbai (BSE) that a formal approval to the expansion plan would be obtained in due course.

Speaking to FE, Tisco vice president-finance, RC Nandrajog, said that installing balancing facilities would mean strengthening weak links that are present in the plants. This would also include blast furnaces but the other areas that are likely to be touched in this project is yet to be decided. Mr Nandrajog further said that the expansion would affect downstream capacity and would be utilised both in the production of long as well as flat products. He said that the capacity expansion project will definitely not put a strain on the company’s finances as Tisco’s revenues has grown at 5.5-6 per cent over the last 10 years or so and the growth will continue.

Mr Nandrajog said that given the present demand, the steel market could absorb another one mtpa of steel.

According to an industry source, this balancing facility is basically a renovation and modernisation expansion project which will develop capacity in the long run. He also stated that the ‘G’ blast furnace expansion is targeted among other areas. This expansion project however would be spread out over a period of about three to four years. This ‘G’ blast furnace which is one of Tisco’s largest furnaces, has a capacity of around 1.8 mtpa.

Tisco recently commissioned the ‘F’ blast furnace after rebuilding and upgradation. The ‘F’ furnace, which earlier produced 0.6 mtpa of hot metal, now produces one mtpa of hot metal after the upgradation.

The ‘F’ blast furnace, which was supported on mantle ring, will is now a free-standing one with all modern features like compact bell-less top, dense plate cooling etc.

The 45-year-old blast furnace was upgraded at half the price of a new furnace. The rebuilding time of 105 days is also one of the shortest in the world given the conditions and job contents. The modernisation was a part of the company’s intensive modernisation programme. Tisco, which has announced capacity expansion of steel and hot metal production facility, may also consider the erection of new finishing mill capacities in long as well as flat products, to match its planned increase in crude steel-making production.