Tata Steel sells its business in the Southeast

Reeba.Zachariah

Mumbai: Tata Steel seeks to sell its "sub-dimensional and non-strategic" activities in Southeast Asia, even if it continues its merger with Thyssenkrupp for its European arm.

A potential divestment of assets, which includes NatSteel Holdings in Singapore and Millennium Steel in Thailand, will help the country's metal manufacturer to focus more on its main market, India, where it plans to "Double" its current capacity 13 million tonnes organically as well as through acquisitions such as Bhushan Steel and the Bhushan Power project.

NatSteel and Millennium Steel were acquired by Tata Steel between 2004 and 2006 for a business value of $ 285 million and $ 400 million respectively. In fact, NatSteel is the one that has allowed Tata Steel to position itself as a bridgehead in the global alloy market. Subsequently, Tata Steel acquired Corus (now Tata Steel Europe) in 2007 for $ 13 billion, which propelled it among the top ten alloy manufacturers in the world.

Responding to a question from a shareholder about a possible sale of NatSteel, N Chandrasekaran, chairman of Tata Steel, said at the annual general meeting that the company is studying any sub-dimensional assets or not as part of its simplification strategy. its business structure.

NatSteel and Millennium Steel (now known as Tata Steel Thailand) together account for 7% of Tata Steel 's consolidated sales of $ 20 billion. During the 2018 fiscal year, NatSteel's profit rose from Rs 134 crore for FY 2017 to Rs 52 crore, while that of Tata Steel Thailand fell from Rs 41 crore to Rs 89 crore. Tata Steel's operations in Southeast Asia suffer from weak demand due to contraction of construction activities.

Tata Steel has already announced plans to reduce its portfolio under its European arm by selling non-core assets in the United Kingdom, Canada, Sweden, Germany and Turkey. These small factories and companies, which together employ 1,100 people, represent a fraction of Tata Steel Europe. Considering that the core business in the Netherlands and Wales will be combined with the German Thyssenkrupp Steel unit in a 50/50 joint venture.