Tata Steel’s 115th Annual General Meeting
Mail News Service
Mumbai/Jamshedpur, June 28: “While global growth has been impacted, India is in a strong position and will remain the fastest growing major economy,” observed Tata Sons and Tata Steel Chairman N Chandrasekaran while addressing the 115th annual general meeting of Tata Steel organized in Mumbai on Tuesday, June 28.
He said that Tata Steel commenced 2022 with expectations of a year of high growth on the macro-economic environment but the Russia-Ukraine war and the resultant geopolitical tensions and trade disruptions were largely responsible for rising commodity and energy prices and supply shortages globally.
The Tata Sons and Tata Steel Chairman stated that the global inflation surged beyond 7.5 percent that was indicatory of a dampened global GDP in the current year. He fixed the issue of expected global growth deceleration to 2.9 percent on major central banks withdrawing liquidity support and raising policy rates at a pace not previously anticipated.
N Chandrasekaran said, “While there are supply-side and inflationary pressures, the demand levers across sectors, from our vantage point, both B2B and B2C continue to remain robust. The front-ended infrastructure spending by the Government including the National Infrastructure Pipeline presents huge opportunities for growth in the medium and long term. We expect that in the coming decade, India will witness significant investment-led growth which will be steel intensive and require significant capacity growth in India. The government has been taking Industry-specific policy measures to tackle inflation which we hope would be short-term measures.”
The Tata Sons and Tata Steel Chairman averred that the Indian steel industry that was globally competitive, should be able to expand the capacity in value added steel products for both ‘make for India’ and ‘make for the world.’ “This is a defining moment in history where the steel Industry can leverage its competitive position and export its products globally not only to earn foreign exchange but also to provide opportunities for capital formation in India, provide employment and allow Indian companies to invest in sustainable technology and create value for the long term,” he said.
While touching on key trends witnessed by steel industries, Chandrasekaran broadly related them to Environment, Digital, Supply Chain and Product Sustainability. “The first trend is towards environmental stewardship covering aspects of air emissions, water management, circular economy and beneficial use of co-products while moving towards de-carbonized steel production. The second trend is towards the development and adoption of digital technologies and advanced analytics capabilities across the entire manufacturing value-chain to be more competitive. The third trend is towards Supply chain resilience and sustainability through accurate and precise demand planning, improved product portfolio rationalization, efficient risk management and stronger supplier partnerships. The fourth trend is towards building innovative products and services pipeline that will ensure better value outcomes while ensuring a strong environmental performance.”
During his speech on the 115th AGM of the Company, N Chandrasekaran attributed the efforts and commitment of the company’s employees during the preceding fiscal loaded with challenges to performance of Tata Steel fiscal 2022 for being the best year in the history of the company.
“During Fiscal 2022, the Company’s consolidated revenues increased by 56% to Rs 2,43,959 crore. The Company achieved its highest ever consolidated EBITDA of Rs 63,830 crore, a growth of 107% year-on-year, translating into an EBITDA per tonne of Rs 21,626. The consolidated profit after tax also increased five times to Rs 41,749 crore,” N Chandrasekaran said.
He informed, “I am happy to announce that for the Financial Year ended March 31, 2022, the Board of Directors has recommended a dividend of Rs 51 per fully paid-up equity share and Rs 12.75 per partly paid-up equity share, translating into the highest ever dividend payout in the Company’s history.”
As part of the restructuring plan of its South-East Asian business, the Company divested its stake in NatSteel Singapore for a consideration of Rs 1,275 crores.
In Europe, Tata Steel achieved complete separation of its UK and Netherlands operations, in October 2021. Under the new structure, Tata Steel UK and Tata Steel Netherlands will operate as two independent companies pursuing separate strategic paths.
The Chairman of Tata Sons and Tata Steel said that the company, for fulfilling its commitments had adopted a Responsible Supply Chain policy based on Environmental, Social and Governance (ESG) principles. Tata Steel encourages its supply chain partners to integrate these principles in their operations and conduct themselves in a manner consistent with this policy.
“Our growth plans continue to be governed by the demand forecast, size of business opportunity, scope for enhancements in our product portfolio and overall balance sheet impact while remaining cognizant of changing regulatory imperatives. This decade, India will see a strong growth primarily driven by infrastructure spending, which will require huge consumption of steel. So, we will continue to stay the course of our strong expansion plan for Tata Steel,” he added.
Tata Sons and Tata Steel Chairman concluded his observation on an optimistic note saying, “Tata Steel is in a strong position to capitalize on improved infrastructure activity.”