Tata steel to grow naturally, new purchases unlikely this decade: MD

Kolkata: Tata Steel Ltd will look to grow organically, and the steel giant is under no pressure to look at fresh acquisitions during this decade, Chief Executive Officer and Managing Director T V Narendran said.

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

Most of our growth in the last few years has been through the inorganic route (acquisitions). Currently, we are in a position where all our growth ambitions can be met through organic growth in our existing sites.

We don't really need to acquire any new assets to grow (output) to 40-50 MTPA (million tonnes per annum) from the present level of 20 MTPA We will rely more on organic growth during this decade, Narendran said.

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

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

Elaborating on the expansion plans of the company, he said the NINL output will be ramped up to 10 MTPA from 1 MTPA, while the Kalinganagar plant will see an expansion to 8 MTPA from 3 MTPA, and later to 16 MTPA.

So, there are huge opportunities and plans being made, he asserted.

Speaking of Tata Steel's decision to stop coal imports from Russia following its invasion of Ukraine, Narendran said the company is aware that the same quantity can be easily sourced from other countries.

We typically buy close to 15 MT of coal annually, of which around 3 MT used to come from Russia which can be easily be sourced from countries like Australia, Indonesia and Canada, he said.

Prohibitive insurance and shipping costs from Russia and Ukraine has made trade with those countries difficult for most partners.

Narendran also ruled out the possibility of hiking steel prices further, as rates were raised earlier this year after the Russia-Ukraine crisis started.

Most of the steel price increase happened in February-April. Right now, costs are stable, so steel prices are stable. We are comfortable with that, the top Tata Steel official said.

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 as compared to the fourth quarter of last fiscal.

Narendran said the demand-supply situation in the steel industry is more balanced at present and this will continue for some time.