Mumbai: Alloy major Tata Steel is looking at divesting its Southeast Asia business as part of a strategy to exit non-scalable businesses and to focus on domestic growth strategy, a top company official said.
The steel major has been scouting for buyers for NatSteel Holdings Singapore and Tata Steel Thailand for some time now but without any success.
“We are looking at all the assets, which are either sub-scale, non-core or whatever, or which can be simplified. We are looking at divesting them,” Tata Steel chairman N Chandrasekaran told the shareholders at the annual general meeting here.
But he added that the company will continue to deploy capital in any assets that have the potential to create long- term value for its stakeholders.
As part of expanding capacity in the domestic market through acquisitions (it has snapped up Bhushan Steel through an NCLT process for over Rs 35,000 crore and is has become the successful bidder for Bhushan Power and Steel for Rs 23,000 crore), it has also approved expansion at the Kalinganagar plant in Odisha to a up capacity to 8 million tonne with an investment of around Rs 24,000 crore.
The expansion will be completed in 48 months, he said, adding the project will also include capability to produce value-added products including cold rolled galvanised and annealed products to serve differentiated customers.
“Bhushan Steel acquisition is a strategic investment which has the potential to enhance our product portfolio and market competitiveness in the near future,” he said.
On bidding for Bhushan Power and Steel, he said, “we have bid for a price that makes sense for us. It is good if we get it. We will wait for the court process.” The company will also continue to evaluate and pursue more growth opportunities in the country through organic and inorganic options, he added.
Commenting on European operations, Chandrasekaran said, “We are waiting for anti-trust approval and hope to close the deal. We have successfully restructured the British Steel pension scheme including closing the scheme for future accruals under the regulated apportionment arrangements, with the approval of the British Pension Regulator.”
On the joint venture deal signed with Thyssenkrupp of Germany last month, he said this will create a leading pan- European steel enterprise.“The joint venture will focus on driving cost synergies, technology and will have a differentiated product portfolio that will drive future value creation.”
Updated Date: Jul 21, 2018 12:16 PM