Tata Steel is turning bullish on growth in India. Its global CEO and managing director, T.V. Narendran, has said the time had come for Tata Steel Ltd to start its next leg of expansion.
“We see great opportunity to grow in India and we have said we want to grow in India. We are well positioned because we have organic and inorganic opportunities to grow,” he told reporters recently.
The CEO said the company’s Kalinganagar project in the Odisha province of India had “shaped up well” and was in full production. It was time to move on the second phase of expansion, already approved by the board.
The Tata Steel board has approved the next phase of capacity expansion in Kalinganagar to 8 million tons per annum, up from 3 million tons at present. The expansion will cost over U.S. $4 billion.
The total capacity of Tata Steel India operations is 13 million tons per annum at present. The expansion is expected to be concluded in 48 months, Tata Steel said in a regulatory filing in December 2017.
What is interesting is that as part of its expansion plans, Tata Steel had submitted bids for at least three stressed steelmakers: Bhushan Steel Ltd, Electrosteel Steels Ltd and Essar Steel India Ltd.
The Tata Steel CEO said the current period was a “great opportunity” for anyone in the steel industry with the appetite and ambition to grow in India. To fund its aggressive expansion plans, the company’s board on Friday approved raising up to U.S. $2 billion (Rs 12,800 crore) through a rights issue.
Starting Feb 14, the rights issue will remain open for subscription for two weeks. Tata Steel had recently raised U.S. $1.3 billion (Rs 8,304 crore) at current exchange rate, through a sale of unsecured bonds in overseas markets. The proceeds of the issue will be used to refinance the group’s offshore obligations.
Incidentally, Tata Steel is also the chief sponsor of the triennial steel conference, organized by the Iron and Steel Institute of Japan, The Chinese Society for Metals, The Korean Institute of Metals and Materials, and the Indian Institute of Metals. It’s coming to India after 2003.
About 70 keynote speakers, half of them from countries such as China, Korea, Japan, Netherlands, U.K., U.S., Germany, Belgium, Canada, are expected to address the meet.
“Academics from the University of Cambridge, and Chongqing University, China, heads of research labs at Nippon Steel and Sumitomo Metal, Japan and POSCO, Korea will address issues such as surface treatment and corrosion, steel products and applications and environmental engineering and waste utilization,” said Anand Sen, Tata Steel’s president of TQM and Steel Business.