The profitability of steel industry will improve: TV Narendran, MD, Tata Steel

In this interview with ET Now, TV Narendran, MD of Tata Steel talks about MIP extension, Kalinganagar plant, steel industry and more. Edited excerpts:

What do you think about MIP extension?

It is helpful for the industry, but the prices in India will be determined by the demand-supply situation. It certainly gives the industry some respite against cheap imports. The industry is very appreciative of this support from the government.

We are hearing now that MIP extension will not be sort beyond October. Will that come as a jolt to you or are you prepared for that?

I think the government is looking at it more comprehensively. They have multiple options. There is anti-dumping duty, safeguard duty, MIP. It does not matter what is there and what is not there as long as the problem is looked at holistically, which the government is doing, and comes out with a solution which addresses the concerns of the industry.

There is a new rule now that you can buy from OMC more iron ore. How will that bring relief for you and also what is the update on Kalinganagar expansion plans?

The current plan is to focus on commissioning the three million tonne facility in Kalinganagar. We are doing quite well. Last month we produced more than 100,000 tonnes. We are on track to produce more than a million tonnes. Our original plan was a million. We said we will move towards million and a half. I think we are heading towards that. So far the plant has been commissioned quite well and we are happy with the ramp up.

As far as OMC is concerned, it gives us an option to buy from OMC which we do exercise once in a while because sometimes it is also driven by a need to manage the logistics. OMC mine is 20-30 kilometres from Kalinganagar and today the market price of iron ore is not very different from the cost of mining iron ore. So we play that option depending on the economics of it.

Moody's report says that Indian steel makers are in a better position as far as profitability and steel demand is concerned. What is your take on that and on steel prices?

The demand in India is certainly growing and India is one of the more exciting markets from a demand growth point of view. We have always said that the cost position of the Indian steel industry is very good.

Indian steel industry is very competitively positioned in a market which is growing in demand, which has some support in form of import duties or anti-dumping duties or safeguard duties. So the profitability of the industry will certainly improve.