India’s leading steel mill, Tata Steel, has announced plans to make huge investments to expand logistics opportunities in the coming years. The proposed investments are aimed not only at reducing the company's logistics costs, but also at transforming it in order to make it more competitive. By the way, logistics costs account for almost 15% of the total cost per year incurred by the company.
In a press release issued by the company, it says that it plans to invest around 5,000 crore, which will lead to a phased significant reduction in logistics costs. Next year, she plans to purchase eight to nine railway rakes. This will be done through its subsidiary Tata Martrade International Logistics (TMILL). In addition, investments will be used for the construction of sludge pipelines for transporting raw materials from various mining sites to steel mills.
It should be noted that currently Tata Steel does not have slurry pipelines, while its competitor Essar Steel owns one of them for transporting ore from mines in Odish to the port.
Narendran, CEO and Managing Director of Tata Steel, noted that the logistic parameter has a significant impact on other cost areas. According to him, the proposed investment will smooth logistics for the business, as well as ensure reliable supplies. Tata Steel has a detailed plan for building a Greenfield port in Odish and investing in the construction of a berth at the Paradip port to make delivery smooth and fast.
