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Tata Steel open to more acquisitions - Mr Ananda Sen

Steel News - Published on Thu, 08 Nov 2018

Image Source: Realty Plus Magazine
Financial Express reported that Tata Steel was open to further acquisition of stressed assets considering the increased demand of steel in the market. There is a consolidation going on in the steel business at present following a down cycle of the sector in the wake of which a lot of steel facilities were either forced to close down or operate at a lower capacity. Those which operated at a lower capacity had to face huge losses, for which there are opportunities to buy assets as a going concern. While Tata Steel is keeping an eye on the National Company Law Tribunal, it is also vying for stressed assets, which are eager to make deals out of court like Usha Martin.

Mr Ananda Sen, Tata Steel’s president (India operations), said that “We are eyeing a capacity of at least 30 million tonne by 2025 in India, in view of the assets we have at present, adding that we are 18.5 mt now, with expansion and new capacities, we expect to have 30 mt capacity in India by 2025.”

Mr Sen said that this projection is based on the existing assets and projects that Tata Steel has in its hands at present. The company had recently taken over Bhushan Steel and Usha Martin’s steel businesses, which has a combined rated capacity of 7.1 million tonne. Kalinganagar’s capacity would reach 8 million tonne after the second phase of expansion, and Jamshedpur plant’s capacity at 13.5 million tonne would take Tata Steel’s total capacity to 28.6 million tonne by 2025.

Bhusan Steel has a capacity of 5.6 million tonne and Usha Martin has 1.5 million tonne. Tata Steel has already charted out fresh investments for both the plants but Sen didn’t want to divulge any details. He said Bhusan Steel is expected to achieve between 4 and 4.2 million tonne of production in FY19, up from 3.5 million tonne it achieved last fiscal. Additional raw material is being supplied to the plant for enhancing production. Iron Ore from the captive mines of Tata Steel has been started to supplying to the Bhusan plant envisioning enhanced production.

However, Tata Steel plans to invest an estimated INR 1,000 crore to achieve 100% capacity utilisation. Mr Sen said that “There can be no cost optimisation without full capacity utilisation. Tata Steel at present was evaluating the investment requirement and that could be anything between INR 500 crore and INR 1,000 crore.”

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Posted By : Ratan Singh on Thu, 08 Nov 2018
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