| It is one of
the youngest members of the 100-year-old Tata Steel group
of companies and the group’s first greenfield project
overseas: Tata Steel KZN (TSKZN), which launched operations
in South Africa in April 2008, is now gearing up to meet
the growing demands for ferrochrome worldwide.
 Steel
or stainless steel has now become a lifestyle product, entering
households as elegant cutlery, tableware and decorative
items; the average consumption of stainless steel has grown
at around 4.5 per cent in the last few years.What gives
steel the ‘stainless’ edge is chromite ore.
The processed ore is used to make high carbon ferrochrome
which makes steel rust resistant and adds the shine and
lustre that makes these items must-haves in homes across
the world.
The genesis
Tata Steel, the sixth largest steel producer globally, is
also India’s largest fully-integrated player of chrome.
“Tata Steel is a recognised, credible and quality-conscious
supplier across the globe and is the only Asian company
to receive the ‘main producer’ status for supplying
ferrochrome to customers in Japan and Europe,” says
Somdeb Banerjee, MD, TSKZN, with pride.
It was in 2000 that the first seeds of what would be TSKZN
were sown. Tata Steel began exploring the possibility of
setting up a greenfield ferrochrome venture outside India.
It was a logical decision: “In spite of having high
quality ferrochrome and a strong customer base, Tata Steel
was losing its competitive advantage due to the high and
rising cost of power,” says Mr Banerjee. The production
of ferrochrome requires huge amounts of power and the power
bills were accounting for nearly 50 per cent of the production
cost.
Tata Steel started scouting for locations outside India
and in 2002 zeroed in on Richards Bay in South Africa. The
benefits were two-fold: cheap power and the highly competitive
freight rates (almost 2 million tonnes of ferrochrome is
exported annually from the port of Richards Bay). TSKZN
came into being in 2003 as a subsidiary of Tata Steel and
Tata Africa Holdings. The first furnace was commissioned
in April 2008 and the second in July. The two furnaces are
expected to produce about 150,000 tonnes per annum of high
quality charge chrome. TSKZN plans to add two more furnaces
in phase two, which will double the production capacity.
Green chrome
True to the Tata group’s tradition of concern for
the environment, TSKZN modified several processes to develop
the most environment-friendly ferrochrome plant. “We
ensured that our environmental standards would meet the
emission norms and air quality standards, likely to be required
in the next five years,” says Mr Banerjee.What this
also means is that TSKZN will not have to retro-fit pollution
control equipment in the future (retro-fitting is usually
less effective than original incorporation). “The
cost for doing this has been significant but the company
would not have done it any other way,” he adds.
TSKZN is also working to reduce CO2 emissions (in keeping
with Tata Steel’s objective to reduce emissions from
1.8 to 1.5 tonnes per tonne of liquid steel, by 2012). It
also has several other projects in the pipeline for making
the company carbon-neutral and is trying to ensure there
is no waste generation.
Building the business
The company had originally envisaged shipping the raw material
(chrome ore and chrome concentrate) from its mines in India.
However the Indian government’s decision to levy a
high export tax made that an uneconomical plan and TSKZN
started sourcing the required ore and concentrate locally.
Commercial production began at the plant in August 2008
and a month later the first shipment of ferrochrome (1506.735
metric tonnes) sailed to customers in China. Since then
TSKZN has exported ferrochrome worth approximately $60 million
to customers in Japan, China, Taiwan and Korea. The customers
include Lianzhong Stainless Steel Corporation, China; POSCO
(South Korea); NKK, Japan; Yeah United Steel Corporation,
Taiwan; and Tsingshan Holding Group, China.
In October 2008, TSKZN commissioned a briquette plant. Briquetting,
a process of agglomeration of chromite fines for charging
into the furnace is an alternative technology to pelletisation
(used by all charge chrome producers in South Africa) and
more environment-friendly. With an existing capacity of
400,000 tonnes of briquettes per annum, the plant can produce
upto 600,000 tonnes per annum with the addition of one more
machine.
Creating value
TSKZN’s success has established Tata Steel’s
credibility in South Africa and hopefully, facilitated its
venture into other areas of minerals and ferro alloys. The
company is also a valued contributor to the South African
economy. It has invested about ZAR 850 million ($85 million)
in the charge chrome / high-carbon ferrochrome project.
Its Richards Bay plant has provided employment to more than
200 local people. It has exceeded its target of having a
female to male ratio of 1:3 among its permanent employees
and achieved its aim of having two thirds of its employees
from HDSA (Historically Disadvantaged South Africans)
Tata Steel’s vision of creating a viable business
in South Africa, which not only creates value for the company
but also delivers value to customers and stakeholders in
South Africa, has undoubtedly been realised.
Community care
Tata
Steel KZN is deeply involved with the community at
Richards Bay, South Africa, and its surrounding areas
in the fields of education, skill development and
the empowerment of women. Recognising
that lack of technical skills is the biggest challenge
facing South Africa, TSKZN has set up a learnership
programme for training local maths- and science-matriculates.
Since 2006, it has trained 91 young men and women
as operators and apprentices. Some of them are now
working in the plant as trainees and it is hoped
that quite a few of them will be inducted as permanent
employees in the future.
Enterprise development is another
area which the company has been addressing systematically.
It has supported ventures by groups of historically
disadvantaged women, given them training in the
basics of business, created opportunities for learning,
and helped them set up companies which have been
awarded contracts on a competitive basis. The women,
who had never been exposed to business, have risen
to the challenge and are doing very well.
The company also supports three
schools situated close to the plant and gives scholarships
to needy students. |
|
