Tata Steel Makes Big Investment in Boosting Logistics Facilities

SEATTLE (Scrap Monster): Leading steelmaker Tata Steel has announced plans to make huge investments to boost logistics capabilities over the forthcoming years. The proposed investment is not only aimed at lowering the company’s logistics cost, but also transform it to become more competitive. Incidentally, logistics cost accounts for nearly 15% of the total cost per annum incurred by the company.

The news release issued by the company states that it plans to invest close to INR 5,000 crore, which will lead to significant lowering of logistics costs in a phased manner. It plans to own eight to nine rail rakes within the next year. This will be carried out through its subsidiary company Tata Martrade International Logistics (TMILL). Apart from that, the investment will be utilized for building slurry pipelines to carry raw materials from various mining locations to steel plants.

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It must be noted that Tata Steel currently has no slurry pipelines, while its competitor Essar Steel owns one to carry ore from mines in Odisha to the port location.

T V Narendran, chief executive officer and managing director, Tata Steel noted that logistics parameter has significant impact over other cost areas. The proposed investment will smoothen logistics for the business, in addition to assuring reliable supplies, he said. Tata Steel has detailed plan to build a Greenfield port in Odisha and invest in building a berth at Paradip Port so as to make shipments smooth and fast.