Tata Steel plans to spend Rs 12,000 crore on capital expenditure (Capex) for its India and Europe operations this financial year, Tata Steel chief executive T V Narendran said.

Tata Steel MD Narendran told PTI in an interview that the domestic steel giant plans to invest Rs 8,500 crore in India and Rs 3,500 crore in the company’s European operations.

Tata Steel’s Capex plan for FY23 said: “We plan to spend around Rs 12,000 crore on Capex this year, of which around Rs 8,500 crore will be in India and the rest in Europe.”

In India, the focus will be on the Kalinganagar project expansion and mining activities, while in Europe, the focus will be on livelihoods, a rich product portfolio and environment-related Capex, Narendran said.

The company is expanding the capacity of its plant in Kalinganagar, Odisha, from 3 tons to 8 tons. He said that Tata Steel would acquire NINL for around Rs 12,000 crore to boost inorganic growth in India.

Tata Steel, through its wholly-owned subsidiary Tata Steel Long Products Limited (TSLP), has completed the acquisition of NINL, a 1 million tonnes per annum (MTPA) steel plant in Odisha, for consideration of Rs 12,000 crore. Talking about the European business, he said it was split into the Dutch business and the UK business.

Tata Steel’s interest in acquiring state-owned Rashtriya Ispat Nigam Limited (RINL) said the company does not have a dedicated large-scale site to produce long products in its portfolio. However, NINL’s acquisition fills that void.

Narendran, a member of the executive committee of world steel, said that the Russian-Ukrainian conflict had affected the global geopolitical order and the global economic order in various ways, affecting the steel industry.
The pandemic has encouraged companies to focus on supply chain cost efficiency and building supply chain resilience.

“On the supply side, the war has significantly affected input costs such as coal and gas costs. Russia and Ukraine have jointly exported around 30 to 40 million tonnes of steel to the global market, which also caused supply disruptions. War-induced inflationary pressures have disrupted government infrastructure spending plans around the world,” he said.

On the outlook for the steel industry, the industry veteran said the first half of the fiscal year was impacted by the Russia-Ukraine war, COVID-related shutdowns in China and India’s steel export tax.

Tata Steel is one of the top three steel-producing companies in the country. According to Narendran, the company’s products in India are nearly 20 million tonnes.

According to the World Steel Association, India’s crude oil production in 2021 will reach 118 million tons (MT).