Just a fortnight after protecting its flanks from predators, the instincts of the hunter have resurfaced in Tata Steel.
Sees big consumption promise in country.
MUMBAI: Just a fortnight after protecting its flanks from predators, the instincts of the hunter have resurfaced in Tata Steel.
The country’s largest private -sector steelmaker is eyeing Indonesia as the next stop for expansion, as it mulls an investment to get another beachhead in South-East Asia.
“Nothing has come to the board for approval yet. If at all, it could be through an acquisition,” said a company source.
A plant in Indonesia will fix the missing piece in the company’s South-East Asian operations. “We’re looking at opportunities in Indonesia and are happy to have plants there,’’ deputy managing director T Mukherjee told in an interview.
“Steel consumption in Indonesia will be much more in the next 10 years with more than 200 million people,” Bloomberg quoted Mukherjee as saying. It will also help the company cater to rising steel demand in Asia.
Its recent plan to set up a unit in Bangladesh was suspended, because of impending elections in the country forcing the government to postpone a decision.
For the Tata group, its foray into Indonesia is part of a larger strategy to enter newer geographies in South-East Asia.
The group has already alluded interest in potential markets such as Indonesia, Vietnam and Philippines.
It is interesting for other reasons too. Indonesia was the launch pad that enabled Lakshmi Mittal, the steel czar, to launch his group big time into the global steel industry.
Its entry into Indonesia may be further triggered by Tata Steel and Tata Power’s joint venture to set up a new power plant in Jharkhand that may be fired by coal sourced from Indonesia.
For Tata Steel, a move to enter Indonesia makes sense after its acquisition of NatSteel in 2005, which has units in Singapore, Thailand, Malaysia and Vietnam. It also has Millenium Steel, the dominant steel company in Thailand. Any additional investment in south East Asia will only add to its market share in the region.
Tata Steel has laid out an ambitious plan to spend about Rs 70,000 crore to treble its production capacity in the next five years.
Some countries in the region, such as Vietnam, have steel consumption growing at over 10% a year.
Other large countries such as Indonesia, which traditionally had a very low per capita consumption of steel, are starting to grow rapidly, Mukherjee on said.
He added that the steel major also “sees potential for growth in Thailand and the Phillipines”.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}