Search the Internet          Tips  Sites: Finance, Investment

Tata Steel seeks acquisitions in allied sectors

Fresh from purchasing ball bearings units of anti-friction bearing corporation, steel major Tata Steel is looking for acquisition opportunities in selected steel and allied business fields.

"We are endeavouring to identify acquisition opportunities in selected steel and allied business fields, and diversification into promising areas that will provide synergy to existing business," Tata Steel officials said.

The corporation's ball bearings unit was purchased with a view to upgrade and expand its own bearings unit at Kharagpur.

The acquired plant had a capacity to produce 10 million numbers of bearings, thereby enhancing the divisions capacity, the officials said.

They said the company plans to enhance its financial position further by restricting capital expenditure to cover only essential balancing facilities, replacements and renewals.

Chairman Ratan Tata had said that the company was geared up to face the global challenges, both within and outside India, following initiatives taken in the past with respect to modernisation, focus on high-end products substantial reduction in manufacturing costs and enhanced customer orientation.

The company had spend about Rs 120 billion since 1980 in acquiring equipment and technology in four phases of modernisation.

The officials said Tata Steel expects steel prices would show some improvement as production cutbacks were effected to correct the over-supply situation.

"However, price recovery will be slow and the steel pricing structure will be highly competitive," they said.

Tata Steel would continue its process of cost reduction and moving up the value chain with an improved product-mix to reduce some of the downsides of steel business cycles.

The company had recorded net sales of Rs 77.59 billion during 2000-2001 against Rs 68.91 billion in the previous fiscal and had managed a higher profit after tax of Rs 5.53 billion against Rs 4.22 billion.

Tell us what you think of this report