Tatas seek big play in S Africa
dnaindia.com — October 06, 2006

The Tata Group is looking at expanding its presence in the hospitality sector in South Africa, Tata Sons executive director R Gopalakrishnan said on Friday.
"We are looking at 3-4 properties in South Africa. These could be acquisitions or greenfield ventures," he told reporters on the sidelines of a conference organised by the All India Management Association. Tata Group's Indian Hotels currently runs a hotel in Zambia, he said.

The group is looking at expansion possibilities in other sectors, including automobiles and engineering in the African continent, he said.

Gopalakrishnan, however, declined comment on media reports that Tata Steel is on the verge of bidding for Anglo-Dutch Corus Group.

But, the Tata Group, he said, is scouting for more overseas acquisitions. "We are looking for opportunities in all areas where we are present," Gopalakrishnan said.

The Tata Group, with $22 billion in annual sales, has interests spanning everything from steel and automobiles to software services and hotels. Gopalakrishnan declined to comment on Corus, the London-based steel maker with which Tata Steel was reportedly in talks, but said in a statement on Thursday that it was evaluating several global opportunities, including a stake in the Anglo-Dutch steelmaker.

The Tata Group has been among the most aggressive Indian companies, many of which are trying to buy companies overseas so to gain global visibility after thriving for decades in India's protected market.

Earlier this week, it announced deals to buy the Ritz Carlton Hotel in Boston and a 30% stake in South African tea maker Joekels.

The moves were part of a strategy to ratchet up ambitions to go global, Gopalakrishnan said. "We are not short of resources. We have strong balance sheets," Gopalakrishnan said. In September, Tata said the group planned to invest Rs 1.2 lakh crore ($26 billion) in expanding its operations.

Corus has previously said it would make sense for the company to team up with a low-cost partner with assets in countries such as Brazil, India and Russia.

Consolidation of the steel industry has been a hot topic since Mittal Steel Co NV won its battle to take over Arcelor SA earlier this year in a deal that will create a titan with control of close to 10% of global production.

Some analysts argue that further consolidation will give the industry more pricing power and greater economies of scale.

Corus is the world's ninth-largest steel producer by 2005 output and Tata is in 56th place, according to figures from the International Iron and Steel Institute.

A combined Tata Corus entity would have an annual steel production of 25 million tonnes, making it the world's fifth or sixth largest steel producer, according to a recent JPMorgan Chase Co report.

Tata Steel, whose current market capitalisation is around $6.47 billion, plans to expand its capacity more than fivefold to 25 million tonnes by 2015, from around 5.2 million tonnes now in India.

Last year, the company bought the 2-million tonnes per year steel making operations of Singapore's NatSteel Ltd and another 40% stake in Thailand's Millennium Steel.