MUMBAI: Tata Steel expects steel demand to revive next fiscal and grow six to eight per cent with the new government driving investments in the infrastructure sector.
Impacted by economic slowdown, steel demand grew just 0.5 per cent to 54 million tonnes in the first nine months of the current fiscal.
Investment sentiments turned negative due to high lending rates, hitting investments in real estate and infrastructure projects, which consumes 60 per cent steel produced in the country.
The automobile sector, which account for 20 per cent of steel consumption, is also facing turbulent times.
Speaking to Business Line, TV Narendran, Managing Director, Tata Steel said steel demand, which is generally a reflection of GDP (gross domestic product) growth, has lagged this fiscal due to overall economic condition.
“Tata Steel would continue to grow ahead of the industry as it will add one million tonne of capacity for the next few years with expansion in Jamshedpur ramping up and three million tonne plant in Odisha project going on stream,” he said.
Despite the overall demand slowdown, Tata Steel has managed to grow its market share by reaching out to newer segments and targeting import substitution.
There is ample opportunity to grow further as India was net importer of steel till three months back.
If the domestic demand is bad then why should India import steel, questioned Narendran.
The focus on customised high-end product along with automobile companies has helped Tata Steel improve its market share even as the entire automobile sector slowed down.
For instance, the company is setting up a continuous annealing plant in joint venture with Nippon Steel Corporation of Japan.
The plant, which will produce annealed steel for the first time in India, is waiting for a few clearances and is expected to start production any time soon, said Narendran.
Once commissioned, the plant will substitute lot of annealed steel coming from Japan and Korea.
The Kalinganagar plant in Odisha is capable of producing high-end steel.
Most of the automobile companies, said Narendran, want to localise their procurements to avoid risks associated with currency fluctuation.