Tata Steel aims to produce 1mn mt steel, annually, from electric arc furnaces (EAF) by 2025, with the completion of the Kalinganagar project, according to Tata Steel CEO and MD, TV Narendran. The company also plans to set up recycling units in Northwest and Southern India to tap the domestic scrap market, said Narendran at an investor briefing on Tuesday.
These recycling units would ideally be built on 50-100 acre land and will source scrap from within 100-200Km. The facility could be further expanded with the addition of a steel melt shop. This model could help the company built multiple smaller units, which can optimize the company’s carbon footprint and reduce freight costs.
Steel demand in India is forecast to grow by approximately 20pc in the calendar year 2021 driven by the government’s infrastructure spending and restart of the economy post regional lockdowns.
In the international market, steel prices would be supported by lower Chinese exports, higher raw material prices and a growing emphasis on decarbonization.
Expansion of India biz
Tata Steel plans to increase domestic steel production capacity from the existing 19.6mn mt to 40mn mt by 2030 through both inorganic and organic expansion between FY2025 and FY2030.
The company is interested in setting up EAF based units in Northwest and Southern India, while its focuses on inorganic growth opportunities in long products.
India business will account for 73pc of the company’s overall revenue by 2030 and the global annual steel production capacity will reach 55mn mt.
The company is more skewed toward flat products, to cater to automobile, oil and gas and other end-user segments. In terms of market share, the company aims leadership position in the auto and high-end engineering segment. In FY2021, Tata steel’s market share in automotive grew to 58pc from 50pc in FY20.
Tata Steel will also expand its downstream capacity with a focus on services and solutions. The company also plans to expand its commercial mining business and pursue newer materials such as graphene and advanced ceramics.