Tata Steel to invest Rs 12,000 cr in FY23 in India and Europe operations: CEO

Tata Steel has planned capital expenditure (capex) of Rs 12,000 crore on its operations in India and Europe in the current financial year, the company’s CEO, TV Narendran, has said.

The domestic steel major plans to invest Rs 8,500 crore in India and Rs 3,500 crore in the company’s operations in Europe, Narendran, who is also the managing director (MD) of Tata Steel, told PTI in an interview.

On Tata Steel’s CAPEX plans for FY23, he said, “We have forecast around Rs 12,000 crore capex for the year of which around Rs 8,500 crore will be spent in India and the rest in Europe.”

In India, the focus will be on the expansion of the Kalinganagar project and mining activity, and in Europe it will focus on livelihoods, product line enrichment and environment-related investments. Narendran said.

The company is in the process of expanding the capacity of its plant in Kalinganagar, Odisha to 8 MT from 3 MT.

On top of that, Tata Steel will spend around Rs 12,000 crore on inorganic growth in India under the acquisition of NINL, he said.

Tata Steel, through its wholly owned subsidiary Tata Steel Long Products Limited (TSLP), has completed the acquisition of Odisha-based million tonnes per annum (MTPA) NINL steel mill for a consideration of Rs 12,000 crore.

Elaborating on European affairs, he said they were divided into Dutch affairs and British affairs.

“This allows us to run Tata Steel as one integrated business with five main sites, three in India and two in Europe. This allows us to focus more on each of our operating sites. European sites have been instructed to become self-sufficient,” he said. said.

On Tata Steel’s interest in acquiring state-owned Rashtriya Ispat Nigam Limited (RINL), he said the company does not have a large site dedicated to the production of long products in its portfolio. However, the acquisition of NINL filled this gap.

Regarding the tariff-related measures taken by the government, Narendran said, “I fully understand and appreciate the constraints of the government to take measures that it has taken to control inflation. However, in the medium and long term , we should actively position India as one of the best places to produce steel in the world.”

Narendran, who is also on the executive committee of the global steel body World Steel Association, said the Russian-Ukrainian conflict has had an impact on the global geopolitical order and the global economic order and therefore on the steel industry. in multiple ways.

The pandemic had already encouraged companies to look not just at supply chain profitability, but also at building supply chain resilience.

“On the supply side, input costs such as the cost of coal and the cost of gas were significantly impacted by the war. Russia and Ukraine together exported about 30 to 40 million tons of steel on global markets and that supply has also been disrupted. Inflationary pressures resulting from the war have disrupted government infrastructure spending plans across the world,” he said.

Regarding the outlook for the steel sector, the industry veteran said the first half of the fiscal year was disrupted due to the fallout from the Russian-Ukrainian war, COVID-related shutdowns in China and the… imposition of export duties on steel in India. .

“I expect the second half of the financial year to be more positive than the first, as I expect India’s steel demand growth to be strong due to the continued focus on on infrastructure spending.

“Steel prices would also have stabilized after absorbing the impact of export duties. I also expect China to recover from the economic impact of the COVID shutdowns in the first half of the year. So, overall, I’m positive about the outlook for the industry for the rest of the year,” Narendran said.

Tata Steel is one of the top three steel producing companies in the country. According to Narendran, the company produces almost 20 million tons in India.

According to the World Steel Association, India’s crude production was 118 million tonnes (MT) in 2021.

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