Despite all of the stories of gloom and doom, India’s single-largest, private, integrated steel maker, Tata Steel, has managed to surprise everyone with its 2013-14 record performance.
The steel major pulled down record highs in both its domestic annual production as well as sales categories at 9.15 million tons and 8.52 million tons, respectively. Not only that, but the year saw Tata Steel registering its best-ever performance in hot metal, crude steel and saleable steel production, as well, according to the company’s statement.
New Production Highs
Hot metal production exceeded the previous best at 9.89 million tons in the just-finished Indian financial year against 8.86 million tons in 2012-13. Crude steel production was the highest-ever at 9.15 million tons compared with the previous best of 8.13 million tons in 2012-13.
Analysts following the company said the results were an indication of the inherent strength of the company and that of India’s overall steel industry. Despite a year where there was hardly any demand, domestically and even globally, Tata managed to post a record performance. Incidentally, India’s real steel consumption grew by a mere 0.6 percent in 2013-14, its lowest in four years, to 73.93 MT, because of a slow domestic economy and lower imports.
Record Fueled by New Business
We at MetalMiner have been tracking Tata Steel very closely for the past several years, reporting on its various twists and turns. Earlier in the year, we reported on Tata opening the UK’s largest cutting center for steel plates at its West Midlands base.
Late last year, Tata Steel decided to venture out into new markets to chart a new growth path. As reported by MetalMiner, Tata Steel UK Holdings (TSUKH), the wholly-owned subsidiary of Tata Steel, had launched a state-of-the-art facility in France that will produce super hardened train track, also called “stress free” rails, which will be three times tougher than normal rail. TSUKH had invested about $65 million USD in the plant.
Tata Steel’s saleable steel production of the company clocked a 12 percent growth in the April-March period from 7.94 MT a year ago. Tata Steel’s sales rose 14 percent from 7.48 MT a year ago, buoyed by “best-ever” sales to the automotive, industrial products and LPG segments.
Segment Sales Rise
Annual sales to the automotive, industrial products and LPG segments rose to 1.17 MT, 1.7 MT and 1.1 lakh tons, respectively. Tata Steel Group’s annual crude steel capacity now stands at over 29 MT per year. The group has production facilities in the UK, the Netherlands, Thailand, Singapore, China and Australia. Production of saleable steel registered a 7 percent growth the January-March quarter, while sales rose 6 percent.
In March itself, the company had announced that it had achieved an all-time record monthly billet production of 304,000 MT, compared to 293,000 MT in the same month of the previous financial year. Confident Tata Steel officials, have in the past, forecast that India’s steel consumption would grow by about 5-6 percent in the new fiscal. However, their assumption was based on a projected 5-7 percent economic growth of India, which not many are confident will happen.
Traditionally, the construction sector accounts for around 60 percent of the country’s total steel demand while the automobile industry consumes about 15 percent. Both the sectors have been plagued by the economic slowdown.
Sohrab Darabshaw contributes an Indian perspective to MetalMiner from New Delhi.