Bhushan Steel is one of the largest secondary steel producing companies
with an existing annual production capacity of 5.6 million tonne. It has country's largest and the only Cold Rolled Steel Plant with an independent line for manufacturing Cold Rolled Coil and Sheet up to a width of 1700 mm.
The secondary steel sector contributes around 57 per cent of the total steel production in the Indian Steel industry. This sector uses the production techniques that make use of the steel scrap or the sponge iron.
If Tata Steel emerges as the winner it would be adding a capacity of 5.6 million tonne Bhushan Steel plant in Odisha to its portfolio. Through this acquisition, Tata Steel can feed its plants in Kalinganagar and Jamshedpur. It also has mines in the east and can save on logistics cost.
Tata Steel has a capacity of 12.7 million tonne — 9.7 million tonne in Jamshedpur and 3 million tonnes in Kalinganagar. It also has the environmental clearance for adding another 1 million tonne in Jamshedpur.
Recently, the Tata Steel board cleared an additional capacity of 5 million tonnes in Kalinganagar for its second phase of expansion. The second phase will be implemented in 48 months. With an addition of 5.6 million tonnes through the Bhushan Steel acquisition, its capacity would be 24.3 million tonne.
Another company in fray for Bhushan Steel is JSW Steel, which quoted Rs 100 billion for the takeover. Both the Bhushan companies
were on the Reserve Bank of India's first list of 12 companies
that failed to repay bank loans.