Jamshedpur: The tubes division of Tata Iron & Steel Company Ltd (Tisco) is all set to double its capacity from the current two lakh tonne to four lakh tonne per annum (tpa) by 2007. 

According to Mr S Manzer Hussain, executive-in-charge of the tubes division of Tisco, is now poised for an expansion. The company had had a “creeping kind of growth in the last few years when it had been trying to consolidate its position”. 

“Having roughly settled the house in order, we have planned that in the immediate future (by 2007) we would double the capacity,” said Mr Hussain. The bigger plan is to expand the capacity to five lakh tpa by 2008 and in the process, it would also like to have a presence in the project-based oil & gas pipeline sector in the coming years. 

“We are exploring the possibility as it is a promising industry ahead,” said Mr Hussain. 

Incidentally, Tisco had earlier planned to hive off this tube division which was not doing well. “We are primarily trying to add on to capabilities by way of modernisation as well as with a new facility, so that technologically it is cheaper to produce as survival today depends upon how much cost-competitive we are,” Mr Hussain said. The steel major’s tubes division today has a capacity to produce around 1.6 lakh tonne per annum of commercial grade tubes (up to a maximum diameter of 150 mm) which have applications in sectors like irrigation, plumbing, etc, and around 0.4 lakh tpa of precision tubes which go to the automobile, power and general engineering sectors. The accent now, so far as the not-so-technology-intensive commercial tubes is concerned, is to increase the company’s in-house annual capacity by around 80,000 tonne and add another 30,000-40,000 tonne capacity by way of contract manufacturing. 

As regards precision tubes, which hold the promise of a world-wide market, especially as more and more automobile giants plan their global outsourcing from this country, the division plans to add a new facility, primarily targeting superior value-added products. 

“Today, we are (in the precision tubes segment) more of a two-wheeler segment supplier and our attempt would be to grow more in the four-wheeler segment,” added Mr Hussain. 

Keeping in mind the growing demand for precision tubes in the expanding global market, the company, in order to put up the new precision tubes facility, is looking for an upgraded version of technology from world-renowned suppliers which “would have process automation as much as possible so that the most sophisticated tubes of very high dimensional accuracy, as is needed in hydraulic and shock-absorber tubes, etc, can be manufactured”. 

It is already in talks with some world-renowned suppliers of technology in Japan, Germany, Spain, etc, in this regard. Asked what sort of investment was envisaged for the expansion projects, Mr Hussain said, “As of now proposals are there to invest around Rs 130-140 crore in the modernisation and expansion in the next two years”. 

The Tata pipes’ brand leverage is more significant in the commercial tubes’ category than in the precision tubes segment. In terms of market share, the company’s commercial tubes enjoy the numero uno position in the country with its presence almost everywhere, while it is at the number three position in the precision tubes’ field. 

With growing output, the Tata Steel division is also looking at the export market once again, especially to the West Asia and Far East countries. Around a decade ago, it was exporting around 25 per cent of the output till the domestic market turned out to be more lucrative. 

The division is also looking at newer technologies which involve use of steel as well as other metals in production of tubes. “It is at an infant stage and we are looking at people who are doing it,” added Mr Hussain. 

The Tata Steel division which sold around 1.86 lakh tonne of tubes in 2002-03 is hopeful of closing the current year by posting a 10-12 per cent growth.