Focusing on deleveraging the record , deploying capital for profitable and high growth projects and restructuring Indian and European operations would be a number of the key initiatives Tata Steel will work on, Koushik Chatterjee, executive and chief treasurer of the corporate , tells in an interview to The MEDIA.
Tata Steel has announced a slew of strategic initiatives for the Indian and European business. How would the corporate appear as if two years down the line?
Very different i feel . The India reorganisation into clusters are going to be completed — which suggests we'll have a way
more synergistic portfolio and customer approach on our downstream
businesses. The synergy implementation of the consolidation, including
Tata Steel BSL, would are completed and that we would have sorted our strategy on the ecu portfolio. which suggests our record would be far more efficient, de-levered and a robust free income business ready for subsequent phase of profitable growth.
How much cash/working capital support are going to be required to stay Tata Steel Europe a going concern this year?
So far we've not given any mission
to Europe during the year. The management has found several self help
measures to sustain the business. There has also been support from Netherlands and therefore the UK governments to businesses impacted by the pandemic which has been availed by Tata Steel Europe.
The
analyst presentation says that the business will pivot around cash.
Does it mean the company’s priority would be to conserve cash instead of expansion or fresh acquisition?
Yes as a part of our corporate strategy we've put specialise in generating free cash flows and record management as a really
high priority. Hence, the capital allocation framework, especially post
the outbreak of the pandemic, has been tightened significantly and
de-leveraging may be a key theme as we've said we'll de-lever the record by about $1 billion once a year for subsequent few years.
Having said that, we even have vital and attractive growth projects, especially the expansion of Kalinganagar, and that we are prioritising capex within that project and identifying facilities which will help us in margin expansion. for instance , the pellet plant which has very significant cost synergies and therefore the cold steel mill complex which will help enrich the merchandise mix and provides better realisations. These projects are vital and can get the allocation for completion as India growth may be a priority and our capital allocation will reflect that within the future.
The company posted a robust operating number for the Indian business. Is it sustainable during this quarter and therefore the next? There are a couple of reasons for the great performance this quarter in India and among them are many internal enablers and a couple of external drivers. Primary among them is that the ability to drive volumes to record levels during the quarter and our specialise in operating costs and blend improvement. The last two factors are clearly ongoing and that we will still drive value from them within the future.The improved market prices due to higher global steel prices and therefore the advantage of that on our mix helped in improving the margins. Without giving any guidance, I can see the present market conditions remaining quite strong and that we hope to continue on our internal efforts to sustain the general level of performance.
Tata Steel BSL posted impressive numbers and therefore the focus is on income and deleveraging. is that the merger with Tata Steel off the table?
No the method is with the NCLT and that we will undergo the due process of law for the merger. There are significant synergies which will be further realised once we merge as we'll have the third hub within Tata Steel.
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