Tata Steel to divest Southeast operations

MUMBAI: Tata Steel is having a look to promote its “sub-scale, non-core” companies in Southeast Asia even because it strikes ahead on a merger with Thyssenkrupp for its European arm.

A possible disposal of property, which includes NatSteel Holdings in Singapore and Millennium Steel in Thailand, will help the homegrown metal maker to extend its focal point on its major market, India, where it plans to “double down” on its present capacity of 13 million tonnes organically as well as thru acquisitions such as Bhushan Steel and the proposed Bhushan Power.

Both NatSteel and Millennium Steel have been received via Tata Steel between 2004 and 2006 for an undertaking worth of $285 million and $400 million respectively. In fact, NatSteel was once the person who put Tata Steel in a beachhead place within the global alloy market. Subsequently, Tata Steel received Corus (now Tata Steel Europe) in 2007 for $13 billion, which catapulted it a number of the top 10 alloy manufacturers on the planet.

Responding to a shareholder’s question on a imaginable sale of NatSteel, Tata Steel chairman N Chandrasekaran mentioned at the annual common assembly that the company is having a look at all property which can be sub-scale or non-core as part of its strategy to simplify its company structure.

NatSteel and Millennium Steel (now known as Tata Steel Thailand) together contributed 7% to Tata Steel’s consolidated sales of $20 billion. In fiscal 2018, NatSteel’s profit fell from Rs 134 crore in fiscal 2017 to Rs 52 crore, whilst that of Tata Steel Thailand’s higher from Rs 41 crore to Rs 89 crore. Tata Steel’s Southeast Asia operations are suffering from weak demand because of a droop in building activities.

Tata Steel has already announced plans to slim down its portfolio housed under its European arm via divesting non-core property in UK, Canada, Sweden, Germany and Turkey. These smaller turbines and companies, which together employ 1,100 folks, account for a fragment of Tata Steel Europe. Whereas the core operations within the Netherlands and Wales shall be mixed with Thyssenkrupp Steel’s German unit in a 50:50 three way partnership.

Tata Steel to divest Southeast operations Tata Steel to divest Southeast operations Reviewed by kailash soni on July 21, 2018 Rating: 5
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