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Tata Steel’s Scunthorpe unit to get upgrade

The COMPANY Plans to spend `400 on its United Kingdom unit

After a spate of negative news for the last several months, Tata Steel is seeing a tide turning at its Europe operations as it plans to invest `400 crore at its Scunthorpe, UK, facility. The unit, which boasts of having supplied long products for the once-tallest Petronas Towers in Malaysia, will see a relining of its Queen Anne blast furnace, according to international media reports.

This will be done at a cost of $77 million, or over `400 crore, to get it up and ready before the plant’s 60th anniversary in April 2014. Relining refers to replacement of the brick and refractory lining, replacement of copper mantle plates and copper stack cooling plates, improvements to the water distribution system and repairs to the gas cleaning system, so on, which help in increasing efficiency and capacity.

A source said the investment is part of the overall plan to revive the European operations announced in 2011. The company’s managing director for European operations -- Karl-Ulrich Köhler -- had announced a $400 million investment in 2011 to upgrade the company, most of which is expected to flow in upgrading the 2,000 acre site at Scunthorpe.

While so far the company has used funds for sustenance, de-bottlenecking and efficiency improvement projects, apart from the commitment made for rebuilding Blast Furnace-4 at Port Talbot, the focus is now turning towards Scunthorpe, sources said.

However, still a final decision rests with the management which will take a call based on market conditions. But UK-based media agencies indicated that workforce has already been mobilised for the relining process. Analysts, however, said these efforts were too small to tide over the demand crisis currently hovering over Europe.

“The European market is not expected to improve and hence the general tepidness will continue not only for Tata Steel but also for other players in the region,” said an analyst. The most important thing for the company to do is to ensure reaching raw material security for its 14 million tonne per annum facility in Europe, he said. “That will lead to a gradual but major revival of the company’s fortunes in the UK.”

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