Following up on yesterday’s MetalMiner piece, Ratan Tata, Tata Steel’s chairman, has predicted a challenging year for his company’s profit growth ahead with the negative impact of its European operations, reports The Hindu.
According to the report, the company is increasingly looking at Asia, Africa and Latin America where the real growth will most likely be, Chairman Ratan Tata said in the company’s annual report, referring to the fall in steel consumption in European countries.
For Tata Steel, sales volume in Europe remained flat through the year at around 3.5 million metric tons per quarter. For Tata Steel, while India contributes 27 percent of the revenue, the UK accounts for 26 percent and the European Union (excluding the UK) 29 percent.
“Steel plants are being closed or moth-balled to conserve costs and to control over-supply,” Tata was quoted as saying in the company’s annual report, referring to the steel consumption slump in the West.
“By contrast, the demand for steel is still buoyant in Asia and Africa where growth rates and investment levels are higher than the West and where new sources of iron ore and coking coal are being developed,” he was quoted as saying.
Tata said that by 2014, Tata Steel would have a global capacity of 33.5 million tons adding another three million tons on full implementation of the Odisha project. The 2.9 million-ton expansion project in Jamshedpur is likely to go on-stream within this fiscal year, taking Jamshedpur’s capacity to 9.7 million tons. Tata Steel’s new 6 million-ton-per-year plant in Odisha is under construction.
According to the company’s website, Tata Steel was established in Jamshedpur, India, in 1907. In the past few years, Tata Steel has invested in Corus (UK, renamed Tata Steel Europe), Millennium Steel (renamed Tata Steel Thailand) and NatSteel Holdings (Singapore). With these, the company has created a manufacturing and marketing network in Europe, South East Asia and the Pacific-Rim countries. It has the capacity to produce over 30 million tons of crude steel every year.
Tata Steel has also set up joint ventures for the development of limestone mines in Thailand, the procurement of low-ash coal from Australia and coking coal from Mozambique, and the setting up of a deep-sea port in Orissa in India. The company is exploring opportunities in the titanium dioxide business in Tamil Nadu, India, and will soon be producing high-carbon ferrochrome from its plant in South Africa.
Tata Steel Europe is Europe’s second-largest steel maker with major operations in the UK and continental Europe.