ⓘ Tata Steel

                                     

ⓘ Tata Steel

Tata Steel Limited, formerly Tata Iron and Steel Company Limited, is an Indian multinational steel-making company headquartered in Mumbai, Maharashtra, India, marketing headquarters in Kolkata, West Bengal, India, and a subsidiary of the Tata Group.

It is one of the top steel producing companies globally with annual crude steel deliveries of 27.5 million tonnes in FY17, and the second largest steel company in India measured by domestic production with an annual capacity of 13 million tonnes after SAIL.

Tata Steel operates in 26 countries with key operations in India, Netherlands and United Kingdom, and employs around 80.500 people. Its largest plant 10 MTPA capacity is located in Jamshedpur, Jharkhand. In 2007, Tata Steel acquired the UK-based steel maker Corus. It was ranked 486th in the 2014 Fortune Global 500 ranking of the worlds biggest corporations. It was the seventh most valuable Indian brand of 2013 as per Brand Finance.

                                     

1. History

Tata Iron and Steel Company TISCO was founded by Jamshetji Tata and established by Dorabji Tata on 26 August 1907. TISCO started pig iron production in 1911 and began producing steel in 1912 as a branch of Jamshetjis Tata Group. The first steel ingot was manufactured on 16 February 1912. During the First World War 1914-1918, the company made rapid progress. By 1939, it operated the largest steel plant in the British Empire. The company launched a major modernization and expansion program in 1951. Later, in 1958, the program was upgraded to 2 million metric tonnes per annum MTPA project. By 1970, the company employed around 40.000 people at Jamshedpur, and a further 20.000 in the neighbouring coal mines. In 1971 and 1979, there were unsuccessful attempts to nationalise the company. In 1990, the company began to expand, and established its subsidiary, Tata Inc., in New York. The company changed its name from TISCO to Tata Steel Ltd. in 2005.

Tata Steel on Thursday, 12 February 2015 announced buying three strip product services centres in Sweden, Finland and Norway from SSAB to strengthen its offering in Nordic region. The company, however, did not disclose the value of the transactions.

In September 2017, ThyssenKrupp of Germany and Tata Steel announced plans to combine their European steel-making businesses. The deal will structure the European assets as Thyssenkrupp Tata Steel, an equal joint venture. The announcement estimated that the company would be Europe’s second-largest steelmaker, and listed future headquarters in Amsterdam.

                                     

2. Acquisitions

NatSteel in 2004: In August 2004, Tata Steel agreed to acquire the steel making operations of the Singapore-based NatSteel for $486.4 million in cash. NatSteel had ended 2003 with turnover of $1.4 billion and a profit before tax of $47 million. The steel businesses of NatSteel would be run by the company through a wholly owned subsidiary called Natsteel Asia Pte Ltd. The acquisition was completed in February 2005. At the time of acquisition, NatSteel had a capacity of about 2 million tonnes per annum of finished steel.

Millennium Steel in 2005: Tata Steel acquired a majority stake in the Thailand-based steelmaker Millennium Steel for a total cost of $130 million. It paid US$73 million to Siam Cement for a 40% stake and offered to pay 1.13 baht per share for another 25% of the shares of other shareholders. For the year 2004, Millennium Steel had revenues of US$406 million and a profit after tax of US$29 million. At the time of acquisition, Millennium Steel was the largest steel company in Thailand with a capacity of 1.7 million metric tonnes per annum, producing long products for construction and engineering steel for auto industries. Millennium Steel has now been renamed to Tata Steel Thailand and is headquartered in Bangkok. On 31 March 2013, it held approx. 68% shares in the acquired company.

Corus in 2007: On 20 October 2006, Tata Steel signed a deal with Anglo-Dutch company, Corus to buy 100% stake at £4.3 billion $8.1 billion at 455 pence per share. On 19 November 2006, the Brazilian steel company Companhia Siderurgica Nacional CSN launched a counter offer for Corus at 475 pence per share, valuing it at £4.5 billion. On 11 December 2006, Tata preemptively upped its offer to 500 pence per share, which was within hours trumped by CSNs offer of 515 pence per share, valuing the deal at £4.9 billion. The Corus board promptly recommended both the revised offers to its shareholders. On 31 January 2007, Tata Steel won their bid for Corus after offering 608 pence per share, valuing Corus at £6.7 billion $12 billion. In 2005, Corus employed around 47.300 people worldwide, including 24.000 in the UK. At the time of acquisition, Corus was four times larger than Tata Steel, in terms of annual steel production. Corus was the worlds 9th largest producer of Steel, whereas Tata Steel was at 56th position. The acquisition made Tata Steel worlds 5th largest producer of Steel.

Steel Engineering and Vinausteel in 2007: Tata Steel through its wholly owned Singapore subsidiary, NatSteel Asia Pte Ltd, acquired controlling stake in both rolling mill companies located in Vietnam: Structure Steel Engineering Pte Ltd 100% stake and Vinausteel Ltd 70% stake. The enterprise value for the acquisition was $41 million. With this acquisition, Tata Steel got hold of two rolling mills, a 250k tonnes per year bar/wire rod mill operated by SSE Steel Ltd and a 180k tonnes per year reinforcing bar mill operated by Vinausteel Ltd.

Bhushan Steel in 2018: Tata Steel acquired the entire company in 2017–18, when Insolvency proceedings were initiated against the former company on 26 July 2017 under IBC. So Tata steel emerged as the highest bidder, and renamed the company Tata Steel BSL.

                                     

3. Operations

Tata Steel is headquartered in Mumbai, Maharashtra, India and has its marketing headquarters at the Tata Centre in Kolkata, West Bengal. It has a presence in around 50 countries with manufacturing operations in 26 countries including: India, Malaysia, Vietnam, Thailand, UAE, Ivory Coast, Mozambique, South Africa, Australia, United Kingdom, The Netherlands, France and Canada.

Tata Steel primarily serves customers in the automotive, construction, consumer goods, engineering, packaging, lifting and excavating, energy and power, aerospace, shipbuilding, rail and defence and security sectors.

                                     

3.1. Operations Expansion plans

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015; it is planning for capacity expansion to be balanced roughly 50:50 between greenfield developments and acquisitions. Overseas acquisitions have already added an additional 21.4 million tonnes of capacity, including Corus 18.2 million tonnes, NatSteel 2 million tonnes and Millennium Steel 1.2 million tonnes. Tata plans to add another 29 million tonnes of capacity through acquisitions. Major greenfield steel plant expansion projects planned by Tata Steel include: 1. A 6 million tonne per annum capacity plant in Kalinganagar, Odisha, India; 2. An expansion of the capacity of its plant in Jharkhand, India from 6.8 to 10 million tonnes per annum; 3. A 5 million tonne per annum capacity plant in Chhattisgarh, India Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005; the plant is facing strong protest from tribal people; 4. A 3 million tonne per annum capacity plant in Iran; 5. A 2.4 million tonne per annum capacity plant in Bangladesh; 6. A 10.5 million tonne per annum capacity plant in Vietnam feasibility studies are underway; and 7. A 6 million tonne per annum capacity plant in Haveri, Karnataka.



                                     

4. Shareholding

As on 31 March 2018, Tata Group held 31.64% shares in Tata Steel. Over 1 million individual shareholders hold approx. 21% of its shares. Life Insurance Corporation of India is the largest non-promoter shareholder in the company with 14.88% shareholding.

The equity shares of Tata Steel are listed on the Bombay Stock Exchange, where it is a constituent of the BSE SENSEX index, and the National Stock Exchange of India, where it is a constituent of the S&P CNX Nifty. Its Global Depository Receipts GDRs are listed on the London Stock Exchange and the Luxembourg Stock Exchange.

                                     

5. Controversies

  • Environment protection at Dhamra Port: The Dhamra Port, a joint venture between Larsen & Toubro and Tata Steel near Dhamra river in Bhadrak district of Odisha, has come in for criticism from groups such as Greenpeace, Wildlife Protection Society of India and the Orissa Traditional Fishworkers Union for environment protection. The port is being built within five kilometres of the Bhitarkanika National Park, a Ramsar wetland of international importance, home to an impressive diversity of mangrove species, saltwater crocodiles and an array of avian species. The port will also be approximately 15 km. from the turtle nesting of Gahirmatha Beach, and turtles are also found immediately adjoining the port site. Aside from potential impacts on nesting and feeding grounds of the turtles, the mudflats of the port site itself are breeding grounds for horseshoe crabs as well as rare species of reptiles and amphibians. The port began commercial production in May 2011. In response, the company website informs that it has been working with International Union for Conservation of Nature IUCN for guidance and assistance in the implementation of environmental standards and designing mitigation measures for potential hazards during construction and operation of the Port.
  • Job cuts at Teesside in UK: In 2009, the subsidiary company Corus announced mothballing of the blast furnace at Teesside. More information: Teesside Steelworks.


                                     

6. Products

The steel plant produces:

  • Iron
  • Alloy
  • Soft iron
  • Cast iron

They also produce:

  • Locomotive parts
  • Machinery, tinplate
  • Cable and wire
  • Rebars
  • Branded products and solutions like Pravesh Doors, Nest-in building structures
  • Agricultural equipment