Tata Steel chairman N Chandrasekaran has said India will be a “focus market” in the near term with domestic steel demand tipped to grow at a significantly higher rate of 6-7% over the next two years.
Addressing the company’s annual general meeting as chairman for the first time, Chandrasekaran said while he expects steel demand in the Euro zone to be “mildly positive”, the company will focus on reducing its Rs 83,014 crore debt burden and building sustainable operations there. Some say Chandrasekaran’s optimism stems from government initiatives such as ‘Make-in-India’, ‘Invest India’, ‘Startup India’ and tax reforms under GST.
The Tata Steel chairman expects steel demand to increase on the back of infrastructure projects such as 100 smart cities, smart armed forces stations, developments of ports and railways.
“We are optimistic of 2017-18 being a better year for the Indian steel industry. We, at Tata Steel, are set to capture these opportunities and India will be our focus,” he said.In step, Tata Steel wants to increase volume of domestic deliveries by nearly 14% to 12.5 million tonnes in FY18 compared with 11 million tonnes in FY17. “We expect to increase this further to around 12.5 million tonnes this year,” he said, addressing shareholders at the company’s 110th AGM.
“We will endeavour to ramp up our production capacity, particularly at Kalinaganagar, and leverage our new and differentiated product range,” he said.
Even as the company saw a 9% rise in revenues in Europe in GBP terms, with 20% increase in average revenue per tonne, Chandrasekaran said the group continued to face certain challenges on the debt front and in operations. “Our consolidated debt is at Rs 83,014 crore and we need to work to towards reducing this to a longterm sustainable level and we also need to focus on building sustainable European operations,” he said at the meeting.
Chandrasekaran also defended Tata Steel’s acquisition of Corus in 2007, refuting allegations made during the change in leadership at Tata Sons last year that former Tata Sons’ chairman Ratan Tata had decided to buy UK-based Corus for more than $12 billion despite reservations raised by some board members and senior executives.
He also defended the company’s communications with Tata Sons, saying that an audit committee undertook a detailed review of the same and had concluded that they were fully compliant with applicable laws.