Tata Steel has emerged as the world’s best steel maker in a study carried out by World Steel Dynamics (WSD). Tata Steel is ranked at the top among 12 companies WSD identified as world-class steel makers. The others in the list include Usinor, Posco, CSN, Baosteel, Mittal Steels, Gerdau, Nucor, Car-Tech, Nippon Steel Severstal and Dofasco.

The various parameters used by WSD to identify world class steel makers includes operating costs, ownership of low-cost iron ore and coking coal, favorable location for procuring raw materials, skilled and productive workforce, electricity cost and low legacy costs. Overall, Tata Steel’s score is 131 while Usinor, ranked second has scored 129.
However, Tata Steel does have its weaknesses.

The fact that it is located in the eastern region of India while the market is on the west coast leads to high freight costs. The plant is located 156 miles from the nearest port, which adds to its costs when importing raw materials and exporting steel products.

Tata Steel, has a current capacity of five million tons per annum at Jamshedpur, India. With another two million tons per annum of finishing capacity at its subsidiary NatSteel Asia, Singapore; with a manufacturing base in seven countries in South East Asia and China, Tata aspires to become a 15 million ton company by 2010 with a de-integrated approach to manufacturing. Tata Steel recently signed a $300 million loan agreement with World Bank’s International Finance Corp. to fund growth plans.