Tata Steel eyes companies in NCLT list for long products expansion

No plans to put up integrated steel plants, says MD & CEO

With a growing market share in the domestic flat steel segment, Tata Steel is eyeing firms facing insolvency under the National Company Law Tribunal (NCLT) to strengthen its long products portfolio. “We will grow in the long products business via the inorganic route and the NCLT is one place which we will be watching for good asset buys in longs,” said T V Narendran, managing director (MD) and chief executive officer (CEO) of Tata Steel.

Both of Tata Steel’s recent acquisitions — Bhushan Steel and Usha Martin — were through the NCLT. While Bhushan Steel’s is flat steel products business, the 1-million tonne Usha Martin unit is into long products.

Flat steel finds application in the automobile industry while long products are used in the construction and infrastructure sector. 

Currently, Tata Steel has a total installed capacity of 18.5 million tonnes in the flat steel division and is present in long products via Usha Martin, which is a subsidiary of Tata Sponge. “We are well placed in the flat products business, and here on will expand in this segment only via brownfield or through debottlenecking. These are three integrated plants in the flat segment and we don’t plan to have more (in this division) as of now,” said Narendran on the sidelines of the March quarter earnings conference held here last week.

The company has plans to expand its 3-million tonne Kalinganagar facility by another 5 million tonnes, work for which is going on and is scheduled to be completed by FY22. Its Jamshedpur plant, which is currently operating around 10 million tonnes, could see capacity go up to 13.5 million tonnes.

Currently, state-owned Steel Authority of India Ltd (SAIL) and Naveen Jindal-led Jindal Steel & Power Ltd (JSPL) are strong players in the domestic long products market, supplying items to railways, defence as well as key construction segments of the country.

“The reason to place Usha Martin under Tata Sponge is to develop the entire long products business as a separate model and considering the nature of this business, capacities could be all over the country unlike the integrated flat business. So, you will find us in all parts of the country and not just in the east (as in the case of flat business),” said Narendran. 

Tata Steel is aiming at an installed capacity of 30 million tonnes by 2025. This would be a mix of long and flat products. At the 111th annual general meeting of Tata Steel, chairman Natarajan Chandrasekaran announced that the company was looking to expand its long products business, considering the growing demand in the domestic market.