Tata Steel's acquisition of UK-based Corus has once again brought into focus new markets and customers it would gain in an industry that is getting consolidated with a few global players. For starters, Corus has more than 50% market share in UK's 15 million tonne annual steel market, and the acquisition would allow Tata Steel to easily leverage the existing network and goodwill. Apart from its links in the UK, Corus has strong relationships with customers in continental Europe, especially in high margin segments like construction, automobile and aerospace industry. Corus has 41% of its 18 million tonne capacity geared to the strip products (which includes cold rolled product applications for the auto industry) and 21% for long products ( which are used for railway lines, beams, wire and reinforcing bar).It is understood that Corus enjoys nearly 14- 15% market share in the European auto steel grade market.Tata Steel, for several years, has been focussing on boosting its presence in higher margin products. For instance, it sold nearly 3,50,000 tonne of cold-rolled, auto grade steel in FY06, which accounted for nearly 37% of the total size of the domestic market. With Tata Steel's export presence in Europe negligible as a proportion of total sales, the synergies for Tata Steel are enormous in the medium-term. Corus is estimated to generate nearly half of its turnover of pound 9.2 billion in CY05 from Europe.Analysts point out that expanding presence in the East-Asian auto grade steel market had been one of the key factors in Tata Steel's earlier acquisitions of Thailand-based Millennium Steel and Singapore-based NatSteel Asia.
