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Tata Steel expects to locate all production in India by 2025

  • Friday, April 26, 2019
  • Source:ferro-alloys.com

  • Keywords:Tata Steel, production
[Fellow]Tata Steel expects to locate all production in India by 2025

[ferro-alloys.com]India's Tata Steel expects to concentrate all its production capacity solely in India by 2025, totaling about 32 million mt/year, the company said late Thursday.

Currently, about 44% of the company's steel production capacity is located overseas while 56% is based in India.

Tata Steel's consolidation plan is in line with the Indian government's aim to have 300 million mt of production capacity in the country by 2030-2031.

The steelmaker is in the process of craving out its European business into a Thyssenkrupp Steel-Tata Steel Europe joint venture. Tata Steel reitered that a European Commission review of its merger proposal is underway and expects the review to be completed in June 2019.

Also, the sale of its Southeast Asian businesses "is on track" and the businesses have been classified as "assets held for sale."

Early January, Tata Steel announced a sale of its stakes in NatSteel Holdings and Tata Steel Thailand to China's HBIS Group for about $327 million. Tata Steel's subsidiary TS Global Holdings will sell the stakes to a company to be set up by HBIS. TS Global Holdings will hold 30% of the new company, while HBIS will own 70%.

Commenting on its performance for the financial year 2018-2019 (April-March), Tata Steel said crude steel production spiked 34.7% to 16.81 million mt against 12.48 million mt the year before, citing its acquisition of Tata Steel BSL and a ramp-up of production at both Kalinganagar and Tata Steel BSL.

Amit Dixit, assistant vice president at Edelweiss Financial Services said Tata Steel's volume growth of 1 million mt is expected during April 2019-March 2020 led by Usha Martin, ramp up of Tata Steel BSL and debottlenecking at Jamshedpur.

Dixit said its domestic operations are better placed compared to peers to tide over the current subdued operating environment.

Tata Steel also said Thursday that it plans to merge Tata Steel BSL with itself.

Looking to its new financial year, Tata Steel expects Indian "demand to witness modest recovery with conclusion of general elections and improvement in liquidity."

"India's domestic steel industry is requesting the government to impose safeguard duties so as to restrict imports at a lower price from countries with whom India has free trade agreements. Any positive development on this will be beneficial for Tata Steel as well," Ashish Kejriwal, senior vice president at IDFC Securities said.

Also "automotive sector demand is expected [to] pick-up slowly," Tata Steel said, citing that it is likely to occur over October 2019-March 2020, from "BS-VI pre-buying".

BS-IV is an emissions standard instituted by the Indian government to regulate air pollution from internal combustion engines. BS-IV vehicles will be banned from April 1, 2020, and replaced by the BS-VI standard.

Tata Steel said its automotive steel sales amounted to 2.25 million mt for fiscal 2018-2019, up 21% year on year.

(S&P Global Platts)

  • [Editor:王可]

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