industry

With the Usha Martin steel plant acquisition eye on strategic growth opportunities in India: Tata Steel


Tata Steel has said its definitive agreement to acquire Usha Martin‘s steel plant in Jamshedpur, is aligned to its stated intent to look at strategic growth opportunities in India.

Fresh from the latest acquisition which literally happened in its backyard, a Tata Steel official said: “It is an attractive investment as the cost of building this investment with time value of money would be much higher.” The location of the facility in Adityapur, near Jamshedpur, further reinforces our commitment to consolidate our presence in Jharkhand and to its industrialization and growth, he added.

This is the first major acquisition outside the NCLT process where it successfully bagged the five million tonne Bhushan Steel in Odisha in April this year.

“Usha Martin’s product range enhances our portfolio with a focus on the high end automotive and engineering segment,” the official said. The alloy steel division of UML with its range of long products, has a significant presence in the automotive segment and gives Tata Steel the opportunity to consolidate its equity in this sector. “We get customer approved products profile from new segments and an ability to earn cash flows from day one. This is aligned to our long term strategy to grow our long products portfolio,” he pointed out.

In particular, the proximity of the plant to Tata Steel’s existing steel works in Jamshedpur , brings in significant synergy in logistics of supply of raw material, especially intermediary steel products.

Apart from steel unit and power plants, the deal also includes an operational iron ore mine and a coal block under development, which will help consolidate Tata Steel’s presence in the raw material sector in Jharkhand and leverage the company’s century-old mining capabilities.





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