The company is looking at setting up a long-steel product division for which they have the necessary land, and some infrastructure is readily available on site, said Sanjay Pattnaik, MD, Tata Sponge.
Tata Sponge Iron posted a strong set of first quarter earnings. In an interview to CNBC-TV18, Sanjay Pattnaik, MD of the company spoke about the results and gave his outlook for the company.
In an interview to CNBC-TV18, Sanjay Pattnaik, MD of Tata Sponge said that the company received environment nod to raise capacity to 425,000 tonne per annum from 390,000 tonne per annum.
In an interview to CNBC-TV18's Anuj Singhal & Sonia Shenoy, Sanjay Pattnaik, MD at Tata Sponge Iron spoke about the company‘s Q3 numbers.
Sponge iron prices have risen sharply over the last three weeks or so due to demand improvement and likely some supply shortages arising out of higher exports, says Tata Sponge's Managing Director DP Deshpande.
Deshpande says 50-60 percent of the price hike will reflect directly in the company's operating profits. Operating profit per tonne should improve to Rs 1,300-1,400 over the longer term and Rs 900 in the medium term
However, net realisations and production costs may not change significantly in the current quarter, says DP Deshpande, MD of Tata Sponge.
DP Deshpande, Managing Director of Tata Sponge, said that coal linkages secures the company for the next five years at 24,000 tonnes per year.
Realisation rate, which was at Rs 12,200 for the fourth quarter of FY16, will remain at the same level for the first quarter of FY17, says DP Deshpande, MD of Tata Sponge Iron.
Tata Sponge is likely to absorb only 10-20 percent of the added cost and the rest will passed-on to the customers, said Managing Director DP Deshpande.
DP Deshpande, MD, Tata Sponge expects slight improvement in margins on back of sponge iron prices firming up.
A 15 percent fall in realizations led to Tata Sponge Iron logging a 75 percent fall in second quarter profit to Rs 5.75 crore but MD DP Deshpande says he does not expect the company to clock a loss in the third quarter.
DP Deshpande, MD of Tata Sponge, says the primary reason behind the disappointing numbers is that realisations in the market have dropped. He does not see the situation in terms of demand for sponge iron improving dramatically in the next three to six months.
The company's profits were down 79 percent to Rs 8.57 crore year-on-year.
Suresh Thawani, MD, Tata Sponge, says that Tata Songe has performed 94% to our rated capacity. We expect good production for the rest of the year. He also says that Orissa block will be operational in two-three years.