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Published on July 18, 2007

Tata Steel managing director B Muthuraman said during a visit here that the local subsidiary, in which the Indian firm has a 76-per-cent stake, currently has the capacity to produce 1.7 million tonnes of steel in Thailand.

He said the blast-furnace expansion plant in Chon Buri's Bo Win Industrial Estate would be completed in October 2008.

Currently ranked the world's sixth-largest steelmaker, with a combined annual capacity of 25 million tonnes, Tata plans to invest an additional Bt400 million annually in Thailand, Muthuraman said.

The top Tata Steel executive is bullish about the long-term prospects of economic growth in Thailand and other Southeast Asian markets, despite the slow-down here in the past year or two. Thailand's gross domestic product is projected to grow 4-4.5 per cent this year, compared with the average of 6-6.5 per cent for Asia.

Given the continuing high growth rates of China (10 per cent per annum), India (9 per cent) and Southeast Asia as a whole, he said steel consumption in Asia was expected to rise 3-4 per cent per annum in the next 25 years.

"Per-capita consumption in Asia should more than double to 400-500 kilograms in the near future - the level currently seen in Europe and the US," he said.

"In fact, people in developed economies consume more steel than food. You just cannot live without steel. In Singapore, per-capita consumption is now 1,000kg [due to a lot of construction projects].

"In Thailand, the figure is just around 200kg per person per year, so the demand will more than double before it levels off, because steel is a fundamental prerequisite for economic growth," he said.

Tata early this year took over the former Millennium Steel, previously controlled by a unit of the Siam Cement Group and NTS Steel, renaming it Tata Steel (Thailand).

"In terms of iron-ore supply, Thailand isn't the best place for making steel, but in terms of demand it's very good, with the prospect of domestic consumption more than doubling from the current 14 million tonnes annually to 30 million tonnes in the next two decades," he said.

Muthuraman said Tata Steel is now the largest unit of the Tata Group, accounting for about half of the group's total revenues. Other group businesses include automobiles, computer software, hotels, tea production, chemicals and power generation.

Nophakun  Limsamarnphun

The Nation