October 08, 2008

TATA Steel may go for more acquisitions

It is reported that TATA Steel after acquiring Corus would go for more acquisition as and when make sense. Mr Ratan Tata chairman of TATA Steel while responding to a shareholder's question at the company's 100th Annual General Meeting, said that "Both TATA Steel and Corus will undertake acquisitions as and when make sense."

Mr Ratan Tata said that the combined entity now have 26 million tonne steel making capacity, 6th largest in the world. He added that the work on its proposed 6 million tonne integrated Greenfield steel plant at Kalinganagar in Orissa is progressing well and orders for some equipment have already been placed. TATA Steel also has plans to set up greenfield projects in Chhattisgarh and Jharkhand for which it has already signed MoUs with the respective governments and initiated dialogues with authorities concerned for allotment of new mines, land acquisition and rehabilitation packages.

He added that the apprehensions in the market post Corus acquisition that its financial performance would be impacted had been proved unfounded and the share prices has gone up by 20% YoY for the past 10 years.

Mr Ratan Tata said that after the successful acquisition of Corus, there were certain challenges that TATA Steel must face. One of them was the successful integration of operating strategies of Corus and TATA Steel. He said that TAT Steel, along with Corus, would look at enhancing its product range to combat competition from plastics and aluminium.

On the steel industry’s future, Mr Ratan told shareholders that despite the gloom forecast by some, the future looked firm. He added that however, much would depend on China in terms of its consumption and also on how the economies of both China and the US fare.