The Jamshedpur-based Tata Steel is all set to enter into a 50:50 joint venture with Larsen & Toubro, the Rs 9,500 crore (Rs 95 billion) engineering giant, to set up a port in Orissa.

According to B Muthuraman, Tata Steel managing director, "It is a decision we have taken only recently."

Muthuraman said the yet-to-be named venture would call for a capital expenditure of Rs 1,500 crore (Rs 15 billion). The port will be operational in three years time.

The decision to build the port comes at a time when the Rs 9,000 crore (Rs 90 billion) Tata Steel is talking of hiking its existing production capacity of 4 million tonnes to 7.5 million tonnes in the next three years.

It is also working on a long-term plan to ramp up production to 15 million tonnes by the end of this decade.

Already, to enhance its iron ore exports, Tata Steel had announced a further Rs 75 crore (Rs 750 million) plan to push exports to China, South Korea and Japan.

"We are going global and we want to export. And we ourselves are importing something like 5 million tonnes," said Muthuraman. This includes import of coal and limestone and the export of iron ore and steel.

"And when we become a 7.5 million plant, this cargo will be 11 million tonnes. So we need a port to ourselves," he added.

He, however, claimed that although the port was being initiated for captive use, "it will also serve other people".

This is more in keeping with Tata Steel's strategy of creating entities to cater to a host of businesses.