Tata Steel to focus on organic growth, fresh acquisitions are unlikely this decade, says CEO

Tata Steel aims to look at organic growth


Tata Steel Ltd will try to grow organically, and the steel giant is under “no pressure” to look at new acquisitions during this decade, said CEO and managing director TV Narendran.

Mr Narendran said the Jamshedpur-based behemoth would fuel its growth ambitions to more than double its output, relying on organic growth at its existing sites.

“Most of our growth over the past few years has been through the inorganic route (acquisitions). We are currently in a position where all our growth ambitions can be achieved through organic growth in our existing sites.

“We do not really need to acquire any new assets to grow (output) to 40-50 MTPA (million tons per year) from the current level of 20 MTPA … We will rely more on organic growth during this decade , “Mr Narendran said in an interview.

Tata Steel reported production of 19.06 million tons in the 2021-2022 fiscal.

The steel behemoth acquired Bhushan Steel in 2018, followed by Usha Martin in 2019. It is also on track to complete the acquisition of Neelachal Ispat Nigam Ltd (NINL) by the end of the April-June quarter.

By expanding the company’s expansion plans, he said the NINL output would be increased to 10 MTPA from 1 MTPA, while the Kalinganagar plant would see an expansion to 8 MTPA from 3 MTPA, and later to 16 MTPA.

“So there are great opportunities and plans being made,” he claimed.

Speaking of Tata Steel’s decision to stop importing coal from Russia after its invasion of Ukraine, Mr Narendran said the company is aware that the same amount can be easily obtained from other countries.

“We usually buy almost 15 million tonnes of coal annually, of which about 3 million tonnes came from Russia in the past – which can be easily obtained from countries such as Australia, Indonesia and Canada,” he said.

Prohibiting insurance and shipping costs from Russia and Ukraine made trading with those countries difficult for most partners.

Mr Narendran also ruled out the possibility of further raising steel prices, as tariffs were raised earlier this year after the Russia-Ukraine crisis began.

“Most of the steel price increase took place in February-April. At present, costs are stable, so steel prices are stable. We are comfortable with that, ”said the top official of Tata Steel.

He said steel prices in India are likely to be Rs 8,000-8,500 per tonne higher in the first quarter of 2022-’23 compared to the fourth quarter of the previous fiscal year.

Mr Narendran said the supply-demand situation in the steel industry is currently more balanced and it will continue for some time to come.

“We are now at a stage where a few things have changed … one is China no longer exports as much steel as in the past, other major exporting countries such as Japan and Korea are also reducing shipments because they do not want to. to import raw materials, leave a carbon footprint and export steel. Therefore, we see greater self-control is exercised by most countries that were traditionally large exporters.In Europe, Ukraine and Russia were also large exporters, but as a result of this war they are also not in the market, ”he explained.

Mr Narendran said steel consumption would continue to grow in India, Southeast Asia and Africa, while demand in mature markets was likely to be gloomy.

However, he said India’s steel demand had traditionally grown at less than the GDP growth rate, while consumption in developing countries “should ideally grow at a faster cut” than GDP.

Mr Narendran also expressed his concern about the stainless steel production target of 300 million tonnes by 2030 as envisaged in the National Steel Policy 2017.

“I do not think 300 million tons by 2030 is realistic, because we lost three or four years due to the pandemic and other factors. Even if it grows at 7-8 percent per year, you will be in the 200-250 million ton range. It will be a more realistic estimate, ”he said.

(Except for the headline, this story has not been edited by techlives staff and is being published from a syndicated stream.)

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