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Tata Steel Limited

Tata Steel is an Indian multinational steel manufacturing company and subsidiary of the Tata Group. It is among the largest steel producers globally with operations in 26 countries. Tata Steel has its headquarters in Mumbai, India and has manufacturing plants located primarily in India, the Netherlands, and the United Kingdom. Some of its major acquisitions include Corus Group in 2007, which made it the fifth largest steel producer worldwide.

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475 views11 pages

Tata Steel Limited

Tata Steel is an Indian multinational steel manufacturing company and subsidiary of the Tata Group. It is among the largest steel producers globally with operations in 26 countries. Tata Steel has its headquarters in Mumbai, India and has manufacturing plants located primarily in India, the Netherlands, and the United Kingdom. Some of its major acquisitions include Corus Group in 2007, which made it the fifth largest steel producer worldwide.

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Tata Steel Limited, formerly Tata Iron and Steel Company

Limited (TISCO), is an Indian multinational steel-making company based


in Jamshedpur, Jharkhand, and is headquartered in Kolkata, West
Bengal, India. It is a subsidiary of the Tata Group.

Tata Steel is among the top steel producing companies in the world with an
annual crude steel capacity of 34 million tonnes per annum. It is one of the
world's most geographically-diversified steel producers, with operations and
commercial presence across the world. The group (excluding SEA
operations) recorded a consolidated turnover of US$19.7 billion in the
financial year ending 31 March 2020. It is the second largest steel company
in India (measured by domestic production) with an annual capacity of
13 million tonnes after SAIL.

Tata Steel operates in 26 countries with key operations


in India, Netherlands and United Kingdom, and employs around 80,500
people. Its largest plant (10 MTPA capacity) is located
in Jamshedpur, Jharkhand. In 2007, Tata Steel acquired the UK-based steel
maker Corus. It was ranked 486th in the 2014 Fortune Global 500 ranking of
the world's biggest corporations. It was the seventh most valuable Indian
brand of 2013 according to Brand Finance.

In July 2019 Tata Steel Kalinganagar (TSK) was included in the list of
the World Economic Forum's (WEF's) Global Lighthouse Network, showing
leadership in applying Fourth Industrial Revolution technologies to drive
financial and operational impact
History

Tata Iron and Steel Company (TISCO) was founded by Jamshetji Tata and
established by Dorabji Tata on 26 August 1907. TISCO started pig iron
production in 1911 and began producing steel in 1912 as a branch of
Jamshetji's Tata Group. The first steel ingot was manufactured on 16
February 1912. During the First World War (1914-1918), the company made
rapid progress. By 1939, it operated the largest steel plant in the British
Empire. The company launched a major modernization and expansion
program in 1951. Later, in 1958, the program was upgraded to 2 million
metric tonnes per annum (MTPA) project. By 1970, the company employed
around 40,000 people at Jamshedpur, and a further 20,000 in the
neighbouring coal mines. In 1971 and 1979, there were unsuccessful
attempts to nationalise the company. In 1990, the company began to expand,
and established its subsidiary, Tata Inc., in New York. The company
changed its name from TISCO to Tata Steel Ltd. in 2005.

Tata Steel on Thursday, 12 February 2015 announced buying three strip


product services centres in Sweden, Finland and Norway from SSAB to
strengthen its offering in Nordic region. The company, however, did not
disclose the value of the transactions.

In September 2017, ThyssenKrupp of Germany and Tata Steel announced


plans to combine their European steel-making businesses. The deal will
structure the European assets as Thyssenkrupp Tata Steel, an equal joint
venture. The announcement estimated that the company would be Europe's
second-largest steelmaker, and listed future headquarters in Amsterdam.
Acquisitions
NatSteel in 2004: In August 2004, Tata Steel agreed to acquire the steel
making operations of the Singapore-based NatSteel for $486.4 million in
cash. NatSteel had ended 2003 with turnover of $1.4 billion and a profit
before tax of $47 million. The steel businesses of NatSteel would be run by
the company through a wholly owned subsidiary called Natsteel Asia Pte
Ltd. The acquisition was completed in February 2005. At the time of
acquisition, NatSteel had a capacity of about 2 million tonnes per annum of
finished steel.

Millennium Steel in 2005: Tata Steel acquired a majority stake in the


Thailand-based steelmaker Millennium Steel for a total cost of $130 million.
It paid US$73 million to Siam Cement for a 40% stake and offered to pay
1.13 baht per share for another 25% of the shares of other shareholders. For
the year 2004, Millennium Steel had revenues of US$406 million and a
profit after tax of US$29 million. At the time of acquisition, Millennium
Steel was the largest steel company in Thailand with a capacity of
1.7 million metric tonnes per annum, producing long products for
construction and engineering steel for auto industries. Millennium Steel has
now been renamed to Tata Steel Thailand and is headquartered
in Bangkok. On 31 March 2013, it held approx. 68% shares in the acquired
company.

Corus in 2007: On 20 October 2006, Tata Steel signed a deal with Anglo-
Dutch company, Corus to buy 100% stake at £4.3 billion ($8.1 billion) at
455 pence per share. On 19 November 2006, the Brazilian steel
company Companhia Siderúrgica Nacional (CSN) launched a counter offer
for Corus at 475 pence per share, valuing it at £4.5 billion. On 11 December
2006, Tata preemptively upped its offer to 500 pence per share, which was
within hours trumped by CSN's offer of 515 pence per share, valuing the
deal at £4.9 billion. The Corus board promptly recommended both the
revised offers to its shareholders. On 31 January 2007, Tata Steel won their
bid for Corus after offering 608 pence per share, valuing Corus at
£6.7 billion ($12 billion).

In 2005, Corus employed around 47,300 people worldwide, including


24,000 in the UK. At the time of acquisition, Corus was four times larger
than Tata Steel, in terms of annual steel production. Corus was the world's
9th largest producer of Steel, whereas Tata Steel was at 56th position. The
acquisition made Tata Steel world's 5th largest producer of Steel.
Steel Engineering and Vinausteel in 2007: Tata Steel through its wholly
owned Singapore subsidiary, NatSteel Asia Pte Ltd, acquired controlling
stake in both rolling mill companies located in Vietnam: Structure Steel
Engineering Pte Ltd (100% stake) and Vinausteel Ltd (70% stake). The
enterprise value for the acquisition was $41 million. With this acquisition,
Tata Steel got hold of two rolling mills, a 250k tonnes per year bar/wire rod
mill operated by SSE Steel Ltd and a 180k tonnes per year reinforcing bar
mill operated by Vinausteel Ltd.

Bhushan Steel in 2018: Tata Steel acquired the entire company in 2017–18,
when Insolvency proceedings were initiated against the former company on
26 July 2017 under IBC. So Tata steel emerged as the highest bidder, and
renamed the company Tata Steel BSL.
Operations

Tata Steel is headquartered in Mumbai, Maharashtra, India and has its


marketing headquarters at the Tata Centre in Kolkata, West Bengal. It has a
presence in around 50 countries with manufacturing operations in 26
countries including: India, Malaysia, Vietnam, Thailand, UAE, Ivory Coast,
Mozambique, South Africa, Australia, United Kingdom, The Netherlands,
France and Canada.

Tata Steel primarily serves customers in the automotive, construction,


consumer goods, engineering, packaging, lifting and excavating, energy and
power, aerospace, shipbuilding, rail and defence and security sectors.
Expansion plans

Tata Steel has set a target of achieving an annual production capacity of


100 million tons by 2015; it is planning for capacity expansion to be
balanced roughly 50:50 between greenfield developments and
acquisitions. Overseas acquisitions have already added an additional
21.4 million tonnes of capacity, including Corus (18.2 million tonnes),
NatSteel (2 million tonnes) and Millennium Steel (1.2 million tonnes). Tata
plans to add another 29 million tonnes of capacity through acquisitions.

Major greenfield steel plant expansion projects planned by Tata Steel


include:

1. A 6 million tonne per annum capacity plant in Kalinganagar, Odisha,


India;

2. An expansion of the capacity of its plant in Jharkhand, India from 6.8 to


10 million tonnes per annum;

3. A 5 million tonne per annum capacity plant in Chhattisgarh, India (Tata


Steel signed a memorandum of understanding with the Chhattisgarh
government in 2005; the plant is facing strong protest from tribal
people);

4. A 3 million tonne per annum capacity plant in Iran;

5. A 2.4 million tonne per annum capacity plant in Bangladesh;

6. A 10.5 million tonne per annum capacity plant in Vietnam (feasibility


studies are underway); and

7. A 6 million tonne per annum capacity plant in Haveri, Karnataka.


Shareholding
As on 31 March 2018, Tata Group held 31.64% shares in Tata Steel. Over
1 million individual shareholders hold approx. 21% of its shares. Life
Insurance Corporation of India is the largest non-promoter shareholder in the
company with 14.88% shareholding.

Shareholders Shareholding

Promoters: Tata Group companies 31.64%

Insurance Companies 21.81%

Individual shareholders 22.03%

Foreign Institutional Investors 15.35%

GDRs 02.41%

Others 07.05%

Total 100.0%

The equity shares of Tata Steel are listed on the Bombay Stock


Exchange, where it is a constituent of the BSE SENSEX index, and
the National Stock Exchange of India, where it is a constituent of the S&P
CNX Nifty.
Its Global Depository Receipts (GDRs) are listed on the London Stock
Exchange and the Luxembourg Stock Exchange.

Controversies

 Job cuts at Teesside in UK: In 2009, the subsidiary company Corus


announced mothballing of the blast furnace at Teesside. More
information: Teesside Steelworks.
 Environment protection at Dhamra Port: The Dhamra Port, a joint
venture between Larsen & Toubro and Tata Steel near Dhamra river in
Bhadrak district of Odisha, has come in for criticism from groups such
as Greenpeace, Wildlife Protection Society of India and the Orissa
Traditional Fishworkers' Union for environment protection. The port is
being built within five kilometres of the Bhitarkanika National Park,
a Ramsar wetland of international importance, home to an impressive
diversity of mangrove species, saltwater crocodiles and an array of avian
species. The port will also be approximately 15 km. from the turtle
nesting of Gahirmatha Beach, and turtles are also found immediately
adjoining the port site. Aside from potential impacts on nesting and
feeding grounds of the turtles, the mudflats of the port site itself are
breeding grounds for horseshoe crabs as well as rare species of reptiles
and amphibians. The port began commercial production in May 2011. In
response, the company website informs that it has been working with
International Union for Conservation of Nature (IUCN) for guidance and
assistance in the implementation of environmental standards and
designing mitigation measures for potential hazards during construction
and operation of the Port.
 Vijay Kumar Sharma is the director of Tata Steel. T. V. Narendran is
the CEO of Tata Steel.

Major competitors

Tata Steel's major competitors include ArcelorMittal, Essar Steel, Jindal


Steel and Power, JSW Steel, SAIL and VISA Steel.

Products

The steel plant produces:

 Iron
 Soft iron
 Cast iron
 Alloy
 Bearings
 Pipes
 Precision Tubes
They also produce:

 Locomotive parts
 Agricultural equipment
 Machinery, tinplate
 Cable and wire
 Rebars
 Branded products and solutions like Pravesh Doors, Nest-in building
structures

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