Tata Steel to hike prices from April 1

Mumbai, March 24 | Updated: Mar 25 2005, 05:30am hrs
Tata Steel will raise its long term contract prices for steel by Rs 5,000 per tonne effective April 1, 2005. Managing director B Muthuraman made this statement on the sidelines of the companys extraordinary general meeting (EGM) held here on Thursday.

Prices at Tata Steel have been hovering in the range of Rs 23,000 per tonne to Rs 30,000 per tonne for various grades of steel products. The company had earlier voluntarily announced a price cut of Rs 2,000 per tonne on August 22, 2004.

The current hike has been triggered by the increase in raw material prices of coal and iron ore. Other steel companies including Jindal Vijayanagar Steel and Essar Steel are working on the prices and would shortly come out with an announcement, sources said.

Earlier, Tata Steel chairman Ratan Tata responding to shareholder queries at the EGM announced the companys intention to secure raw material mines with the objective to not only be competitive, but also self sufficient.

While steel plants are located throughout the world, its raw materials are scarce and are not available at all locations. As a result, steel companies in control of the raw materials will be the kings in this business, he said.

The company has plans to secure its raw materials requirement for an estimated production capacity of 12-15 million tonne by 2008-09. To achieve this, the company has planned a capital outlay of Rs 21,500 crore in the next 5-6 years, Mr Tata said.

At the EGM, shareholders gave their nod to raise Rs 5,000 crore through issue of securities in the domestic and international markets. The proceeds would be used to fund a greenfield steel project in Orissa, development of port at Dhamra in Orissa, a metallurgical coke plant at Haldia in West Bengal apart from various acquisition opportunities in India and overseas.