Tata Steel has planned capital expenditure (capex) of Rs 12,000 crore on its India and Europe operations during the current financial year, company CEO TV Narendran said.
Narendran, who is also the Managing Director (MD) of Tata Steel, told PTI in an interview, the plan is to invest Rs 8,500 crore in India and Rs 3,500 crore on the company’s operations in Europe.
On Tata Steel’s CAPEX plans for FY23, he said: “We have planned a capital expenditure of around Rs 12,000 crore for the year, of which about Rs 8,500 crore will be spent in India and the rest in Europe.”
Narendran said that in India, the focus will be on expansion and mining activity of the Kalinganagar project, and in Europe, it will focus on sustenance, product mix enhancement and environment-related capital expenditure.
The company is in the process of increasing the capacity of its plant at Kalinganagar, Odisha from 3 MT to 8 MT.
In addition, Tata Steel will spend about Rs 12,000 crore on inorganic development in India in the acquisition of NINL.
Tata Steel, through its wholly owned subsidiary Tata Steel Long Products Limited (TSLP), completed the acquisition of Odisha-based one million tonne per annum (MTPA) steel mill NINL for Rs 12,000 crore.
Elaborating on European trade, he said that it was divided into Dutch occupation and British occupation.
“This allows us to run Tata Steel as an integrated company with five major sites, three in India and two in Europe. This allows us to focus more on each of our operating sites. The task of making European sites self-sufficient. assigned,” he said. Told.
On Tata Steel’s interest in acquiring state-owned Rashtriya Ispat Nigam Limited (RINL), he said the company does not have a dedicated large site for production of long products in its portfolio. However, the acquisition of NINL has bridged this gap.
On the duty measures taken by the government, Narendran said, “I fully understand and appreciate the action taken by the government to control inflation. However, in the medium to long term, we need to proactively India should position itself as one of the best places to produce steel in the world.”
Narendran, who is also part of the executive committee of apex steel body World Steel Association, said the Russia-Ukraine conflict has affected the global geopolitical order and the global economic order and hence the steel industry in many ways.
The pandemic had already encouraged companies to not only look at cost efficiencies in supply chains, but also to build resilience in supply chains.
“The supply side has been significantly impacted by the war on input costs like cost of coal and cost of gas. Russia and Ukraine together used to export about 30 to 40 million tonnes of steel to global markets and that supply has also been disrupted. War-borne inflationary pressures have disrupted government infrastructure spending plans around the world.”
On the outlook for the steel sector, the industry veteran said the first half of the financial year was disrupted due to the Russia-Ukraine war, the COVID-related shutdown in China and the imposition of export duty on steel in India. ,
“I expect the second half of the financial year to be more positive than the first half as I expect steel demand growth in India to be strong based on continued focus on infrastructure spending.
“Steel price would also have stabilized after absorbing the impact of export duty. I also expect China to recover from the economic impact of the COVID shutdown in the first half. So overall I am about the prospects for the rest of the industry. Positive year,” Narendran said.
Tata Steel is among the top three steel producing companies in the country. According to Narendran the company produces around 20 million tonnes in India. According to the World Steel Association, India’s crude oil production stood at 118 million tonnes (MT) in 2021.