M&As was word that was never used in Tata Steel, but now the company is sending its top management to places like Wharton to learn on how to acquire companies and it has also become an important subject in the company’s internal training. This is because Tata Steel is aspiring to produce 15 million tonne of steel by 2015 and some new capacities will come through the mergers and acquisitions route. “The seeds of that you have seen in the Natsteel acquisition and you will see more of such acquisitions,” Dr Amit Chatterjee, advisor to the MD, Tata Steel, said. 

Mr Chatterjee said, Tata Steel is going to do in the next five years what it has not done in the last 97 years of its corporate history. It will be almost doubling production to 7.4 million tonne by 2008 and 15 million tonne by 2015. Tata Steel will be investing Rs 8,000 crore in the next five years on its expansion. A six million tonne plant is coming up at Dubri in Orissa. Apart from expanding its steel business, Tata Steel is also simultaneously exploring new industries such as platinum, titania and ferro-chrome. The company already has a ferro-chrome plant in South Africa for this.

These new areas should be contributing about 15 to 20% of the company’s business. The company is also looking at using the natural gas in Bangladesh to make steel there with the iron ore coming from India. Mr Chatterjee was in Pune to talk at the distinguished lecture series organised by Tata Research Development and Design Centre (TRDDC), a division of Tata Consultancy Services Ltd. Mr Chatterjee was honoured by TRDDC for his contributions to metallurgical processes, especially those relating to the steel industry in India.

Mr Chatterjee was chief technology officer till September 2004 and head of Tata Steel’s R&D division from August 1987 to March 1993. Innovations, ingenuity, intellectual capability and its own iron and coal mines which gave it control over raw materials had made Tata Steel amongst the lowest cost producers of steel in the world, Mr Chatterjee said. India produces 32 million tonne of steel and has climbed up one position to number eighth in the world.

China was at number one at 240 million tonne while the next few nations are in the 110 to 115 million tonne range and the good news is that these nations are either stagnating or on the descendency curve. “Everybody else is on a flat graph or a descendncy graph,” Mr Chatterjee said. “India would become the second largest steel producer in the world 10 years from now when it produces 120 million tonne of steel and this figure could go up to 150 million tonne also, Mr Chatterjee said. “We should be just behind China. We have high quality of iron ore which Chinese does not have and also technological merit with similar labour costs,” he added.