Indian steelmaker Tata Steel will invest $1.35-1.62 billion as capital expenditure every year over the next five years and double its debt reduction target from $1 billion to $2 billion by the end of the current fiscal year, a company official said on Wednesday, July 7.
“Tata Steel will continue to deleverage and make its balance sheet stronger in order to position for its next phase of growth. This year, I can certainly say that it will be much more than our announced policy of $1 billion of debt reduction,” Koushik Chatterjee, chief financial officer, told investors at a meeting.
Mr. Chatterjee said that during the fiscal year 2020-21 the company had reduced debt by around $4 billion and that the targeted annual capital expenditure was excluding any funding required for acquisitions which would be revisited separately.
T V Narendran, managing director and chief executive officer (CEO), informed investors that Tata Steel had three active production sites at Kalinganagar and Angul in the state of Odisha and Jamshedpur in the state of Jharkhand and that aggregate production capacities of these mills could go up to 40 million mt per year, provided it is supported by a strong balance sheet and demand.
Tata Steel’s current Indian production capacity is 19.6 million mt and the second phase of expansion of the Kalinganagar mill from 3 million mt to 8 million mt will be completed by 2023-24.
“Between fiscal 2024-25 and 2029-30, both organic and inorganic growth will be pursued. Even if we do organic growth, we can go up to 40 million mt capacity based on available land at our three existing sites,” Mr. Narendran said. He said that for inorganic growth Tata Steel is seeking opportunities in long products and will participate in the government’s disinvestment process of the privatization of the steel mills of Neelachal Ispat Nigam Limited (NINL) and Rashtriya Ispat Nigam Limited (RINL), as and when the government starts the process.