Tata Iron and Steel Company (Tisco) managing director Jamshed J Irani told newspersons at a meeting on Friday that at least 20 per cent of the 1.2 million tonne capacity of the mill would be used to make auto body sheets. He admitted that negotiations had begun already with prospective customers among automobile manufacturers like Ford, Volvo and Daewoo.

Auto body sheets are primarily imported. Tata Steel already makes some automobile grades of steel and its customers include Telco, Maruti Udyog and even the in-house "Indica". Irani took care to point out though, that the relationship with group companies was an "arms length relationship" notwithstanding the commitment to group synergy (and a new group logo.)At present, Telco lifts less than three per cent of Tisco's steel production of 3.5 million tonne and Tata Steel will constitute only 60 kg ofthe 350 kg weight of the Indica. When on stream the modern cold rolling mill will export 30 per cent of its output.

Even so, the Tisco focus on the emerging market for automobile grade steel at home shows in its commitment to access the latest in technology.

Tata Steel was the only Indian company in a consortium of 35 steel producers worldwide, to promote a $22-million research and development project for evolving ultra light auto body sheets (ULSAB).

Tata Steel lent its expertise and energy to make 10 specially designed car bodies. It has now taken on the responsibility of displaying a demonstration kit, including a car body in white, that is 25 per cent lighter than conventional models.

The demonstration kit was on display at the IETF'99 and will move on to other cities. "Three years ago it became obvious that aluminium and fibre glass were intruding into the market for steel (auto) bodies," Irani said.

The revelation brought together 35 steel producers from 18 countries, who commissioned PorcheEngineering Services Inc. of the US, to design and manufacture a car body that was 25 per cent lighter than conventional models.

The ultra light car body is now a reality and Volvo is known to have begun commercial production of such models.

The Tisco managing director pointed out that auto body sheets would comprise very little of the new capacity being built at Jamshedpur. Close to 80 per cent of the capacity of Tisco's new cold rolling mill will be for steel used for architectural purposes, tubes, etc.

The company had at one point toyed with the idea of commissioning another cold rolling mill at Gopalpur, but the project ran into rough weather. "The idea was to have two units right at the beginning," Irani said, "Gopalpur did not pick up because of the infrastructure (bottlenecks) and we started (work) on Jamshedpur."

The Rs 1,600-crore mill is part of Tisco's Rs 7,000-crore modernisation project. Nearly Rs 5,000 crore of the phase-IV modernisation project cost has already been spent.

The updatescheme essentially involved phasing out outmoded technology and mills, to make room for state-of-the-art facilities. Technological upgrading has coincided with trimming organisational flab.

The Tisco workforce, which was close to 77,000 strong at one time, has already been brought down to less than 60,000, through successive voluntary retirement schemes (VRS). Irani said Tisco targeted a workforce of 55,000 in the coming year.