Tata Steel expects $25 bn global turnover
The Economic Times — January 6, 2008

Tata Steel, with its global arm Corus, is poised to cross a combined global turnover of $25 billion in 2007-08. Apart from Corus, Tata Steel group includes Nat Steel Asia and Millenium Steel.

"We are looking at a turnover of $25 billion this year. The Corus acquisition came into effect on April 3, 2007, and hence the impact will be on Tata Steel's balance sheet of FY 2008," Tata Steel managing director, B Muthuraman said at a press conference here on Saturday.

"Our EBIDTA margin is also set to double from the current level of 12-13% to 26% in next five years as a result of the Corus acquisition," he added. A substantial part of the improved earnings would come from the second wave of synergy that Tata Steel hopes to derive along with Corus on technology, systems and processes over these years.

On its own, Tata Steel is investing Rs 42,000 crore in adding new steel plants at Kalinganagar in Orissa and Jamshedpur in a few years. The company kicked off the expansion programme at Jamshedpur to raise capacity from 7 to 10 million tonne last week.

"Our greenfield projects in Jharkhand and Chhattisgarh are some distance away. We only hope to start work in Jharkhand by 2009 while work on the Chhattisgarh project is expected to start in 2008," Mr Muthuraman said.

"I was in Brazil two weeks ago. It is an important country for us since it has iron ore but no consumption by steel companies," he said. This is the first time that Tata Steel has admitted its interest in Brazilian ore. The company recently acquired 75% stake in an iron ore asset in Ivory Coast in a bid to ensure long-term raw material supply post Corus acquisition.

Mr Muthuraman, however, refused to comment on whether Tata Steel would like to acquire iron ore mines on its own in Brazil or enter into partnerships with mining companies. "It has not been explored," he said.

Incidentally, CVRD, one of the world's largest iron ore mining companies is based in Brazil. "We are also looking at raw material assets in every country. We have picked up stake in a coalmine in Mozambique. We may look at Indonesia too," Mr Muthuraman said.

Talking about its SEZ at Gopalpur, Orissa, the Tata Steel MD said: "We are looking for partners who will promote infrastructure within the SEZ. It will be a multi-product SEZ, and the project should take about 24 months to be implemented."