TV Narendran, Managing Director - Tata Steel India and South East Asia shares his views about the year gone by and the promises 2016 holds for Tata Steel and the sector.
“Tata Steel began a new chapter this year by dedicating Kalinganagar Steel plant to the State of Odisha which defines the vision of the company towards future growth and value creation for the Company and its stakeholders. With Kalinganagar integrated steel plant in place, we are confident that we will be able to sell the volumes that will start coming out. We are also opening up new segments as the product range from Kalinganagar is wider and thicker compared to Jamshedpur unit. We continue to build on the equity we have in the market place with our customers and we are the supplier of choice for many of our B2B customers. We have a strong distribution and branded business which accounts for about 40% of our revenue and of this the pure B2C play is about 20% of our total revenue. We have also opened up the SME segment over the last few years and have made significant inroads into the LPG segment.
Overall 2015 has been a tumultuous year for commodity sector globally. Global Steel industry is going through one of its toughest phases in recent times. Indian steel industry has also been affected by the global oversupply situation, one of the biggest challenge being Imports from steel surplus countries like China, Japan and Korea. The sharp increase in imports and predatory pricing has impacted the profitability of Indian producers. Indian government has taken cognizance of the situation and has introduced measures to curb the surging imports. The Government of India is aiming to scale up steel production in the country to 300 MT by 2025 from 81 MT in 2013-14. Despite the gloomy situation, the steel sector has been working tirelessly towards achieving this target.
Steel prices in India have dropped by ~ 40% in the last 18 months wherein, internationally, the steel prices dropped by roughly 30%. The pace of economic growth in the country is encouraging for the steel sector. In light of the investments in infrastructure building, we can expect increase in demand next year. In fact demand in India, is expected to grow to 87.6 MT in 2016, from 75.9 MT in 2014 and 81.5 million tonnes (MT) in 2015. The focus for 2016 is to ensure a level playing field for the domestic industry, which is skewed due to the increasing imports.”