A Global Player   A Product Pioneer   A Corporate Citizen                          103rd Annual Report                    ...
A Global Player >> A Product Pioneer >> A Corporate Citizen           It was the best of times, it was the worst of times....
Inside the gas holder - part of the BOS gas recovery scheme at Port Talbot, UK.
ContentsTheme Note ................................................................................... 01          Annexur...
Chairman’s StatementDear Shareholder,Following two years of the worst global economic              an economic recovery to...
Steel has been and will                                                                   be, the basic foundation        ...
Board of Directors as on 25th June, 2010Mr. Ratan N. Tata, Chairman                     Mr. B. Muthuraman, Vice Chairman  ...
Dr. Jamshed J. Irani                              Mr. Andrew Robb                                          Mr. S. M. Palia...
Tata Steel Group Senior Management             H. M. Nerurkar                       Kirby Adams                Dr. Karl-Ul...
Senior Management    Uday Chaturvedi                     Anand Sen                            Frank Royle                 ...
> A CO R P O R AT E C I T I Z E N                                                                                         ...
EBITDA                                                                            Profit After Tax                        ...
world’s            The      10th largest              steel company             and the world’s            2nd most       ...
H. M. Nerurkar                         > A CO R P O R AT E C I T I Z E N                                                  ...
Koushik ChatterjeeThe collapse in private business investment and declinein consumption levels due to high unemployment ra...
Management Speak (cont’d)Company severely and resulted in significant losses in              Teesside, while continuing to...
demand and rebalance the economy in a bid to counterpotential asset bubbles and overcapacity. Gross FixedCapital Formation...
Management Speak (cont’d)                                                                India and around US$ 844 million ...
in the form of a slowdown in domestic demand caused               The Company’s financial strategy is focused onby soverei...
> A CO R P O R AT E C I T I Z E N                                                                                         ...
volatile, so the Company has found it necessary to               venture (JV) between Tata Steel and Tata Power thatshield...
Improvement Initiatives across the Tata Steel GroupDuring the last fiscal year, the Tata Steel Group (TSG) undertook targe...
FINANCING INITIATIVE AT TATA STEEL INDIA                                       Action: In early 2008, Tata Steel Limited h...
Improvement Initiatives across the Tata Steel Group (cont’d)Considerable progress has been made in strengthening the work ...
FLAT ROLLING GROUP•   Based on learnings from Jamshedpur and facilitated    through the PIT, the Hot Strip Mills at IJmuid...
Corus’s Continuous Annealing Process Line.                                                                                ...
Product PortfolioOver the years, the Tata Steel Group has placed a continuous emphasis on improving processes,with a view ...
AEROSPACETata Steel Europe supplies high           CONSUMER GOODSintegrity steels to major global          Tata Steel manu...
Product Portfolio (cont’d) > MEETING CUSTOMER NEEDS ACROSS SEGMENTS                                                       ...
SECURITY AND DEFENCE                                                                            In a world where protectin...
Research & DevelopmentResearch & Development (R&D) activity within the Tata Steel Group takes place in 5 majorcentres name...
of raw materials from captive sources. These projectsinclude new technology to produce low ash clean coal,beneficiation of...
The Vitality Centre, IJmuiden, the Netherlands.Tata Steel Europe’s‘Silent Track’ solutionis helping to cut noisepollution ...
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Annual report-2009-10

  1. 1. A Global Player A Product Pioneer A Corporate Citizen 103rd Annual Report 2009-2010
  2. 2. A Global Player >> A Product Pioneer >> A Corporate Citizen It was the best of times, it was the worst of times...Never before has this famous line meant more. The roller coaster ride that the last twoyears took the global economy through, proved one fact – that a successful enterpriseneeds to have the resilience to withstand the highs and lows of a future that oftencomes unheralded.As a global enterprise, Tata Steel was not unaffected by the challenges ofthe last two years. Yet, the Company demonstrated resilience by taking severalproactive initiatives across all geographies. A tough start to the year was balancedby a rebound in the second half, when these initiatives began to pay off.Undeterred by the economic turbulence, the Company continued to place emphasison working practices in health, safety and corporate citizenship , withspecific initiatives taken in all these areas.In addition, a continued focus on engineering solutions for customers, is helping itmaintain its position of a product pioneer.Tata Steel believes in staying alert to future opportunities while never letting go ofits core values. This is the philosophy that has underpinned its growth over the yearsand one that remains its key driving force.
  3. 3. Inside the gas holder - part of the BOS gas recovery scheme at Port Talbot, UK.
  4. 4. ContentsTheme Note ................................................................................... 01 Annexure to the Auditors’ Report ........................................ 124Chairman’s Statement ................................................................ 04 Balance Sheet ............................................................................. 128Board of Directors ....................................................................... 06 Profit and Loss Account .......................................................... 129Tata Steel Group Senior Management ................................. 08 Cash Flow Statement ............................................................... 130Consolidated Financial Highlights 2009-10 ....................... 10 Schedules forming part of the Profit and Loss Account .......................................................... 132Management Speak ................................................................... 14 Notes to Schedule 4 ................................................................. 134Sustaining Growth ...................................................................... 20 Schedules forming part of the Balance Sheet ................ 135Improvement Initiatives across the Tata Steel Group .... 22 Notes on Balance SheetProduct Portfolio ......................................................................... 26 & Profit and Loss Account ....................................................... 150Research & Development ......................................................... 32 Balance Sheet Abstract and Company’sCorporate Citizenship ................................................................ 34 General Business Profile .......................................................... 176Review of Operations ................................................................. 42 Summary of Financial Information of Subsidiary Companies ............................................................. 177Awards, Recognitions and Certifications ............................ 48 Consolidated Financial StatementsNotice .............................................................................................. 49 Auditors’ Report ......................................................................... 186Directors’ Report .......................................................................... 57 Consolidated Balance Sheet .................................................. 188Management Discussion and Analysis ................................ 73 Consolidated Profit and Loss Account ................................189Corporate Governance Report ............................................... 95 Consolidated Cash Flow Statement .....................................190Highlights 2009-10 ................................................................... 117 Schedules forming part of the Consolidated Profit and Loss Account ............................... 192Sources and Utilisation of Funds ......................................... 118 Schedules forming part of theProduction Statistics ................................................................ 119 Consolidated Balance Sheet .................................................. 194Financial Statistics ..................................................................... 120 Notes to the ConsolidatedDividend Statistics .................................................................... 121 Financial Statements ................................................................ 200Financial Ratios .......................................................................... 122 Consolidated Financial Ratios ............................................... 230Auditors’ Report ......................................................................... 123 Proxy/Attendance Slip ............................................................. 231 The Annual General Meeting will be held on Friday, 13th August, 2010 at Birla Matushri Sabhagar at 3.30 p.m. As a measure of economy, copies of the Annual Report will not be distributed at the Annual General Meeting. Shareholders are requested to kindly bring their copies to the meeting. Visit us at : www.tatasteel.com | E-mail : cosec@tatasteel.com | Tel.: +91 22 66658282
  5. 5. Chairman’s StatementDear Shareholder,Following two years of the worst global economic an economic recovery to take place at this crucial timedownturn in most peoples’ living memory, the world rather than drive the world into another collapse dueseems to be regaining some economic stability but to the spiraling cost of basic materials.with some dramatic shifts in concentration of economicstrength. The growth rates in the economies of the Through these difficult times, Tata Steel has struggleddeveloped world are still extremely moderate, while to adhere to its long-term strategies, both in Indiacountries in the developing world have registered high and overseas. There has nevertheless been need tolevels of economic growth and some have become re-schedule and re-prioritise investment strategies innew centres of global capacity, demand and control consonance with market conditions during this period.over natural resources. In India, the Company has given top priority toIn the developed world, there are definite signs of a the 2.9 million tonne expansion programme at itsrecovery in the United States. Continental Europe is Jamshedpur Works and its major greenfield 6 millionseeing a much more modest level of economic revival tonne integrated steel plant in Orissa. Tata Steel Asiawith some concerns about its sustainability. In the has steelmaking and finishing facilities in variousUnited Kingdom, a recovery is yet to take place. Asian countries (including India) aggregating 10.5 million tonnes. Equal importance has been given toBy contrast, in the developing world, China, India, raw material security through the acquisition of ironBrazil and certain Asian countries are registering very ore and coal resources overseas to feed its UK andstrong and sustainable economic growth with robust European plants, while rationalising capacities to makedomestic markets. In 2025, it is forecast that the BRIC them viable in this period of slack demand.countries will have 42% of the global population, willconsume 60% of the global production and will have Some of the decisions have been hard and some of70% of the global GDP. the actions have been painful. Nevertheless, these were necessitated in order for the overall enterprise inThe steel industry has also been impacted by these the UK and Europe to survive. While Tata Steel’s Indianglobal shifts. The requirement of steel is growing operations have remained profitable, albeit at a lowerin Asia, where downstream user industries are level than the previous year, Tata Steel’s Europeanexperiencing high demand, whereas the markets for operations remained underutilised and hencesteel in the United Kingdom and Continental Europe unprofitable. However, with the rationalisation, thehave remained depressed. Major iron ore and coking European operations have become EBITDA positive forcoal resources have continued to be controlled by three the last two quarters. The benefits of the rationalisationcompanies which continue to opportunistically elevate will of course be more evident in the coming year.prices that can never be passed on to the customerin these depressed times. One hopes that better As the economies of several nations return to normalcy,sense prevails and a more responsible perspective is the demand for steel-based goods will undoubtedlyadopted by these mining companies, so as to enable grow. This is already starting to be evident in 4
  6. 6. Steel has been and will be, the basic foundation material for national growth and the industry will continue to be an important ingredient in a global economic recovery. Ratan N. Tata, Chairmanautomotive products, building construction and large output of between 40-50 million tonnes, with majorinfrastructure projects. Steel has been and will be, the manufacturing plants in India, several countries inbasic foundation material for national growth and the Asia, the UK and Continental Europe, supported byindustry will continue to be an important ingredient integrated mining operations in several geographies.in a global economic recovery. The concentration of Tata Steel has managed to weather the storm andeconomic growth rates, manufacturing capacities, the Company looks forward to the opportunity ofmarket size and control over natural resources will fulfilling its objective of being a viable and innovativeshift markedly towards Asia, Latin America and the CIS international steel producer in the years ahead.countries. China, India and Brazil will become importantcentres of economic growth in the coming decade.In the coming years, Tata Steel expects to emerge Chairmanas a global steel producer with a total annual Mumbai, 31st May, 2010 5
  7. 7. Board of Directors as on 25th June, 2010Mr. Ratan N. Tata, Chairman Mr. B. Muthuraman, Vice Chairman Mr. Nusli N. Wadia Mr. Ishaat Hussain Mr. Subodh Bhargava Mr. Jacobus Schraven COMPANY SECRETARY Mr. A. Anjeneyan SHARE REGISTRARS TSR Darashaw Limited, 6-10, Haji Moosa Patrawala Industrial REGISTERED OFFICE Estate, 20, Dr. E. Moses Road, Mahalaxmi, Mumbai 400 011. Bombay House, 24 Homi Mody Street, Fort, Mumbai 400 001. Tel.: +91 22 6656 8484 Fax : +91 22 6656 8494 / 6656 8496 Tel.: +91 22 6665 8282, Fax : +91 22 6665 7724 / 6665 7725 E-mail : csg-unit@tsrdarashaw.com E-mail : cosec@tatasteel.com, Website : www.tatasteel.com Website : http://www.tsrdarashaw.com 6
  8. 8. Dr. Jamshed J. Irani Mr. Andrew Robb Mr. S. M. Palia Mr. Suresh Krishna Mr. Kirby Adams, Managing Director & CEO, Mr. H. M. Nerurkar, Managing Director, Tata Steel Europe Tata Steel LimitedLEGAL ADVISORS AUDITORSAZB & Partners, Amarchand & Mangaldas & Suresh. Messrs Deloitte Haskins & SellsA. Shroff & Co., Mulla & Mulla and Craigie Blunt &Caroe, Herbert Smith LLP, Cleary Gottlieb Steen &Hamilton LLP, Linklaters LLP, Allen & Gladhill LLP 7
  9. 9. Tata Steel Group Senior Management H. M. Nerurkar Kirby Adams Dr. Karl-Ulrich Köhler Managing Director Managing Director and Chief Operating Officer Tata Steel Limited Chief Executive Officer Tata Steel Europe Tata Steel Europe Group Corporate Functions Koushik Chatterjee Jean-Sébastien Jacques Manzer Hussain Group Chief Financial Officer Group Director Group Director (Strategy) (Communications) Kees Gerretse Avneesh Gupta Dr. Debashish Bhattacharjee Group Director Group Director Director (Research, Development (Procurement) (Total Quality Management) and Technology) Andrew Page Dr. Paul Brooks Shreekant Mokashi Director Director Chief (Health and Safety) (Environment) (Group Information Services) 8
  10. 10. Senior Management Uday Chaturvedi Anand Sen Frank Royle Abanindra M. Misra Theo Henrar Managing Director Vice President Director Vice President (Coke, Sinter and Managing DirectorCorus Strip Products UK, TSE (TQM and Shared Services) TSL (Finance) TSE Iron, and IR) TSL Corus Strip Products IJmuiden, TSE Varun Jha Tor Farquhar Radhakrishnan Nair Adriaan Vollebergh Partha Sengupta Vice President (Engineering Director Chief Human Resource Officer Managing Director Vice Presidentand Chhattisgarh Project) TSL (Human Resource) TSE TSL Tata Steel International, TSE (Raw Materials) TSL Hridayeshwar Jha Alastair Aitken N.K. Misra Dook van den Boer Sanjeev Paul Vice President Managing Director, Distribution Group Head Manufacturing Director Vice President (Orissa Project) TSL UK and Ireland, TSE (Mergers and Acquisitions) TSL Corus Strip Products IJmuiden, TSE (Corporate Services) TSL Jon Bolton T.V. Narendran Rod Jones Bimlendra Jha V.S.N. Murty Manufacturing Director Vice President Director Vice President Chief Financial Controller Corus Long Products, TSE (Safety and Flat Products) TSL (Corus Consulting) TSE (Long Products) TSL (Corporate) TSL Laptawee Senavonge Vivek Kamra Sandip Biswas Lim Say Yan A. Anjeneyan President President and CEO Group Head (Corporate Finance, Group Head (Corporate Assurance Company Secretary and Tata Steel Thailand NatSteel Holdings Treasury and Investor Relations) TSL and Risk Management) Chief of Compliance, TSL Helen Matheson Dr. Shaun Doherty Arun Misra Director Legal Executive Officer to the CEO Principal Executive Officer TSL - Tata Steel Limited TSE TSE TSL TSE - Tata Steel Europe 9
  11. 11. > A CO R P O R AT E C I T I Z E N Consolidated Financial Highlights 2009-2010 Turnover (Rs. in crores) 150000 147,329 102,393 140000 120000 100000 80000 > A P R O D U C T P I O N E E R 60000 40000 25,395 26,202 27,504 23,292 20000 0 FY09 FY10 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 Turnover = Sales and Other operating income (-) Excise Duty Net Debt/EBITDA 3 5 60 32 4 2 60 50 > A G LO B A L P L AYE R 40 30 20 10 0 FY09 FY10 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 Net Debt/EBITDA (Annualised)Bridge spanning the Guadalquivir River at Seville, Spain.Corus supplied the wire.
  12. 12. EBITDA Profit After Tax (Rs. in crores) (Rs. in crores) 4,95120000 5000 18,495 9,34018000 400016000 300014000 2,434 20001200010000 1000 473 8000 0 6000 5,333 -1000 4000 3,401 -2000 2000 -2,009 -2,209 204 402 -2,707 0 -3000 FY09 FY10 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 FY09 FY10 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10EBITDA = Profit before exceptional items and taxes (+) Net Finance Charges Profit after taxes, minority interest and share of profit of associates (+) Depreciation (-) Minority Interest (+) Share of Profit of Associates EBITDA Margin Return on Invested Capital (Pre-tax) 20% 8% 13% 25% 20% 25% 13% 9% 1% 2% 13% 19% 20% 15% 15% 10% 10% 5% 5% 0% -3% -4% 0% -5% FY09 FY10 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 FY09 FY10 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 EBITDA Margin = EBITDA/Turnover Net Operating Profit before tax and exceptional items / (Net Fixed Assets (excluding WIP) + Goodwill + Investments + Adjusted Net Current Assets) 11
  13. 13. world’s The 10th largest steel company and the world’s 2nd most geographically diversified steel producer. The Musea de la Ciencias (Science Museum) in Valencia, Spain has used Tata Steel’s Kalzip® roofing. A balanced global presence in over 50 markets and manufacturing operations in 26 countries.> A G L O B A L P L AY E RAs a truly global player, events across the globe have a direct impact on theCompany. In keeping with its spirit of positive action, it has converted manyof the global challenges of the last year into opportunities for growth. world’sOne of thelowest costproducers of steel. A shareholder base of over 800,000An employeestrength over people.81,000 across Team members Sean Dicks (standing) and Nigel Pearce5 continents. checking the repair on a compressed air leak prior to re-commissioning at Orb Electrical Steels, Tata Steel Europe.
  14. 14. H. M. Nerurkar > A CO R P O R AT E C I T I Z E N Management Speak As part of its continuing endeavour to communicate with various stakeholders on matters relating to the Company performance, the market conditions, financial performance and future plans, the senior management team of the Tata Steel Group has had several interactions during the year with equity investors and analysts, credit rating agencies, financial institutions Kirby Adams including lending banks, unions, the > A P R O D U C T P I O N E E R Government and other stakeholders. The following excerpts capture highlights of the conversations that the senior management team comprising Mr. H. M. Nerurkar (Managing Director, Tata Steel), Mr. Kirby Adams (Managing Director and Chief Executive Officer, Tata Steel Europe), Dr. Karl-Ulrich Köhler (Chief Operating Officer, Tata Steel Europe), Mr. Koushik Chatterjee (Group Chief Financial Officer) and Mr. Jean- Sébastien Jacques (Group Director, Strategy) have had with the stakeholders.Dr. Karl-Ulrich Köhler q How has the global economic crisis affected > A G LO B A L P L AYE R the Steel Industry in the last 12 months? This has been the worst global crisis in living memory. The global financial landscape has changed significantly since September 2008 and this has had a severe impact on the global economy in the last 18 months. The lack of capital had resulted in a significant decline in demand across most sectors globally and in steel too we saw demand contracting in many end-user segments in the first half of 2009-10. The Eurozone economy contracted by 2.7%, with the UK falling by 3.7% in the 12 months ended December 2009.
  15. 15. Koushik ChatterjeeThe collapse in private business investment and declinein consumption levels due to high unemployment ratesled to low capacity utilisation in the steel industry in thefirst half of the year. Europe and the US were the mostaffected regions, being in the eye of the storm, but therewere cascading effects across other geographies as well,including emerging economies like India.The immediate impact on the steel industry was the sharpdecline in volume due to the lack of credit among customers.As a consequence steel prices across the world declined Jean-Sébastien Jacquessignificantly. In order to match the reduced demand, steelcompanies, especially in the US and Europe, reduced theircapacity utilisation by temporarily taking capacity offstream. However in emerging economies like India, thecredit shortage was not as acute as in the western worldand so demand conditions continued to be relatively stable,even though prices dropped significantly in line with theglobal pricing scenario. The South East Asian economiestoo witnessed a demand contraction in 2009, partly due todomestic issues, as in Thailand, or due to lower economicactivity, especially in the construction sector, resulting fromrisk aversion and credit concerns.q Tata Steel Europe recorded a turnaround in the second half of the year. How was this achieved?2009-10 was really a year of two halves for Tata Steel Europe(TSE). During the first half of the year the European operationswere significantly affected by market conditions, which ledus to temporarily shut down one Blast Furnace in each ofour sites at IJmuiden, Port Talbot and Scunthorpe. This led to > In emerging economies likecapacity utilisation rates falling to as low as 53% in the first India, the credit shortage wasquarter of the financial year. In addition the Company faced not as acute as in the westernserious challenges at its Teesside facility due to the sudden world and so demand conditionsand unilateral termination of a 10-year Offtake Agreement by continued to be relatively stable,4 international customers of the slab produced in Teesside. even though prices droppedThe Company was consequently left exposed to the highly significantly in line with the globalvolatile international slab market, as Teesside slab cannot be pricing scenario.used internally beyond the volumes agreed under the Offtakeagreement. These unforeseeable developments affected the 15
  16. 16. Management Speak (cont’d)Company severely and resulted in significant losses in Teesside, while continuing to seek long-term solutionsthe first half of the year. A detailed financial analysis for the site.shows the majority of the full year EBITDA losses at TSEresulted from the action of the Offtakers. On a year-end analysis, Tata Steel Europe registered a significant turnaround in the second half of the yearDespite these adversities, the Company’s employees with an EBITDA of around £ 297 million compared to anexhibited remarkable tenacity in weathering the EBITDA loss of £ 476 million in the first half of the year.downturn during this challenging period. The Company The recently launched initiatives on ‘Customer First’ andcontinued on its path towards delivering the savings supply chain management are expected to help theidentified under the ‘Weathering the Storm’ programme, Company’s performance further in the future.which totalled almost £ 866 million during the year, aswell as implementing the ‘Fit for the Future’ restructuringprogramme. While top-line revenues at the European q How did the Indian and South East Asian operations perform during this year?operations declined by almost 35% due to lower volumes Operating performance in India was very good,and prices, very significant measures to bring about with increased production from the new furnacesoperating cost savings were undertaken to offset some and improvements in operating parameters such asof the resulting losses. Cost reduction is a continuing reductions in fuel and lime consumption, improvementactivity across our businesses in Europe, as is productivity in the mill yields and increased production at the cokeimprovement and working capital management. These ovens in Jamshedpur and Haldia. On the sales side,enormous achievements have been realised despite very despite the challenging market conditions, we haveserious challenges in the market. produced and sold more than previous year. Downstream businesses, such as Tubes and Wires, also performed well,In the second half of the financial year market especially in the second half of the year. The Company’sconditions started to improve gradually and the marketshare in key customer segments like automotiveCompany began to bring back on stream some of also increased, largely due to increased volumes andcapacity it had idled, although pricing pressures enhanced delivery compliance during the year.continued throughout virtually the whole year.The Company launched several initiatives aimed at The operating performance of the South East Asianserving the market and customers better through business was generally stable, though the impact ofthe ‘Customer First’ programme and also started high scrap prices in the last quarter depressed margins.investments to improve the supply chain process A great deal of effort in these operations was put intoacross the Company. Increased capacity utilisation tight working capital management, with significantrates, a better cost base and an improved pricing results. The outlook for the region, especially inscenario helped the Company post a turnaround in the Singapore, is likely to be robust in 2010 and we expectEuropean operations from the December 2009 quarter the situation in Thailand to stabilise soon.onwards. However, having run the Teesside operationsfor almost 10 months after the Offtakers walked outof the Agreement and having incurred severe losses, q What are the likely impacts of the slowdown in China on the global steel industry?the Company had regrettably to take the decision to Chinese policymakers have resorted to specificpartially mothball the iron and steel making facilities in monetary tightening measures to curb speculative 16
  17. 17. demand and rebalance the economy in a bid to counterpotential asset bubbles and overcapacity. Gross FixedCapital Formation, which accounts for 48% of GDP inChina, is expected to slow, but real steel demand isexpected to grow by 8% as end-user demand in theauto, appliance and machinery sectors continuesto show strong growth momentum. The threat ofincreased exports from China, due to the slowdown inits construction sector, has risen but there is a view thatthe Chinese authorities will continue to consolidate thesteel industry as 25% of the country’s producers areprice sensitive and have a high cost base. The Chinesegovernment faces the prospect of an appreciatingcurrency amid weakening global demand and thecountry’s steelmakers can therefore be expected toproduce steel primarily to meet domestic requirementsrather than subsidise other countries by exportingsteel below production cost. In this scenario, pricingof raw materials will decline, easing tightness in theseaborne supply of raw materials. Adverse steel pricingdevelopments in China can restrict international steelprices but are not expected to lead to any sustainedspurts in export volumes.q What are your views on the steel market in India?The intensity of metals consumption in India remainslow, by both developed as well as emerging marketstandards. However, we believe that India is movingtowards a period of materials-intensive growth, drivenby key growth enablers like infrastructure spending,urbanisation and investment in manufacturing sectorssuch as automotive. India is in a unique position as asteelmaking nation, given the attractions of risingdomestic demand, a rich minerals endowment andcompetitive production factors. On the other hand theproblems that steel companies are facing to initiategreenfield capacity expansions, due to land acquisitionconstraints and delayed mining approvals, will leadto a widening supply deficit. In order to enhance the Tata Steel Europe (Corus) has a vital role to play in the renewable energy sector.
  18. 18. Management Speak (cont’d) India and around US$ 844 million in TSE during the year. The Company also raised new loans amounting > Near-term economic indicators to US$ 2 billion in Tata Steel India to fund its for 2010 suggest strong growth in long-term investments in raw material projects and the core industries, with very buoyant – expansion of the Jamshedpur Steel Works. During the indeed record – industrial production year the Company took steps to restructure its debt expected in the second half of portfolio by exchanging US$ 493 million of its existing the year. Convertible Bonds (CARS) with US$ 546.94 million- worth of new Foreign Currency Convertible bonds, which benefit from having a lower yield to maturity,country’s economic competitiveness, it is essential to longer tenure and more equity-like features.set up large new steelmaking capacities that will notonly have supply-side benefits, but will also have very Net consolidated debt as at March 31 2010 stood at US$material and positive implications for economic activity 9.8 billion, taking into consideration liquid cash and cashin the regions where they are located. These issues equivalents on the books as at March 31 2010 of US$ 1.9need the urgent attention of the government, whose billion. This was 12.5% down from the consolidated netintervention is required to facilitate the setting up of debt as at March 31 2009 of US$ 11.2 billion.new Indian steel capacity.Near-term economic indicators for 2010 suggest strong q What is the Eurozone steel market outlook? European (EU) steel demand declined by 24% ingrowth in core industries, with very buoyant – indeed 2009-10 due to weak demand in steel using sectors inrecord – industrial production expected in the second the last 18 months. Some sectors were supported byhalf of the year. Discretionary spending has risen on government stimulus packages, such as automotivethe back of reduced unemployment prospects and (aided by scrappage schemes) and rail, which receivedhigher spending power among the rural masses. This investment in certain countries. In the second half ofhas resulted in strong growth in the auto and consumer the year real steel demand started to stabilise anddurables sectors. India’s steel consumption growth rate the rate of destocking started to moderate. The EUis expected to rise to around 12% year-on-year in the steel market opened on a relatively positive note innear future. early 2010, with the manufacturing PMI rising sharply in March, reaching its strongest level since Januaryq How has the Tata Steel Group’s debt position moved compared to the previous year? 2007. This is a reflection of the combined effect of the sustained upswing on global trade, an increasinglyGross debt in the Tata Steel Group of US$ 13.3 billion positive outlook for EU exports and low stock levels.in March 2009 fell to US$ 11.8 billion by the end of The rebound is expected to raise apparent consumptionMarch 2010 (applying uniform exchange rates). The by 15% year-on-year, but underlying demand is stilldecrease came about because repayments exceeded fragile and consumption levels are not expectednew loans committed during the financial year and to reach pre-crisis levels before 2012. Exports willbecause currency rates moved in the Company’s continue to be the key driver for economic growth, asfavour. The Company repaid around US$ 2.2 billion the depreciation of the Euro is likely to increase theof debt (including some pre-payments) in Tata Steel competitiveness of EU industries. Structural headwinds 18
  19. 19. in the form of a slowdown in domestic demand caused The Company’s financial strategy is focused onby sovereign debt issues in countries like Greece and optimising the cost of capital in its marginal financing,mounting fiscal deficits in several countries remain a improving its credit rating and the efficient allocationconcern and could slow impending recovery. of resources. This is designed to enable the Company to continue focusing on rebalancing its capitalq Could you elaborate on the strategic priorities for Tata Steel India? structure while funding value-accretive projects for the long-term benefit of shareholders.Tata Steel India is one of the most competitiveoperations in the global steel industry. The key featureof our operations is the culture of performance q How have the raw material projects progressed during the year?improvement and of continuously looking at new The coal project in Mozambique and the ironmeans to break the barriers of performance through ore project in Canada are the key projects in theaspirational target setting. Right now the Company’s strategy to enhance the Group’s raw materialskey priority is to execute the 3 million tonne expansion integration. Significant progress has been madeproject at Jamshedpur. When completed in the third by the management of the Joint Venture companyquarter of the financial year 2011-12, this project with Riversdale Mining in Mozambique towards thewill enhance the capacity of the Indian operations to development of the Benga reserves, as is shown by10 mtpa. In addition, the Company is focusing on the the Benga Coal and Benga Power projectsseveral downstream facilities that are being set up in receiving environmental clearance. A feasibilitycoated and packaging products, which are consistent study into the production of 10.6 million run-of-with the Company’s long-term strategy to increase mine tonnes in 2 phases has been completed, whichthe ratio of value-added products in its output. The envisages initial production of 5.3 mtpa by end-2011.Company continues to pursue its long-term strategy to The Benga coal reserves have been upgraded by 84%build greenfield capacity in India, including in Orissa. to 502 million tonnes and the measured coal resource by 126% to 710 million tonnes, firmly establishingq What are the broad contours of the Tata Steel Group’s financial strategy? Benga as one of the most significant coal deposits outside Australia. The Company is also one of theOver the last 18 months the Company has had a clear largest shareholders in Riversdale Mining Limited,priority of focusing its efforts on maintaining liquidity, which is listed in Australia.not only to finance the existing business but also tocontinue funding its new growth projects in India New Millennium Ltd (NML), a company listed in Canadaand its investments in raw material projects overseas. in which Tata Steel is currently a 27.4% shareholder,The Company consistently carried well in excess of recently approved the findings of a feasibility studyUS$ 1 billion in liquidity through the year for these to develop its 100%-owned Direct Shipping Ore (DSO)purposes. It reduced its gross debt by more than iron ore properties in Quebec and Labrador. TheUS$ 1 billion in the second half of the financial year by Project has proven and probable mineral reserves ofpre-paying debt. The Company also raised equity 64.1 million tonnes and the mine is expected tocapital of around US$ 500 million during the year produce around 4 mtpa of sinter fines from 2011.through a listing of Global Depository Receipts on the Tata Steel has an 80% stake in the DSO project togetherLondon Stock Exchange. with 100% offtake rights. 19
  20. 20. > A CO R P O R AT E C I T I Z E N Sustaining Growth Recognising the need for growth as the world recovers from the financial crisis, the Tata Steel Group has put into action initiatives that will ensure its growth is sustainable. These initiatives span the entire supply chain, from raw materials to logistics and value-added manufacturing. The expansion will allow the Company to utilise its existing 2.9 MTPA EXPANSION PROJECT resources more efficiently, AT JAMSHEDPUR whether they be manpower, The Indian operations of Tata Steel are among the most utilities or the Company’s cost competitive in the world, so expanding the capacity captive mines. of the Jamshedpur plant in Jharkhand is naturally one > A P R O D U C T P I O N E E R of the Group’s key strategies. Tata Steel proposes to expand the Jamshedpur works’ capacity to 9.7 million tonnes per annum (mtpa) of crude steel by 2011-12. Tata Steel and Centennial Steel Company Ltd., a 100% subsidiary of Tata Steel, are jointly implementing the 2.9 mtpa expansion. This additional capacity will allow the Company to use its existing resources more efficiently, whether they be manpower, utilities or the Company’s captive mines. The project will also require less time to complete than building a greenfield steel plant. The expansion project will involve setting up the following new facilities: a 3.05 mtpa capacity blast furnace, 2 coke oven batteries each with a capacity of 0.7 mtpa, a 6 mtpa pellet plant, a 2.4 mtpa Thin Slab Casting & Rolling (TSCR) facility, a Linz-Donawitz (LD) Basic Oxygen Converter and a > A G LO B A L P L AYE R lime calcining plant. The configuration and capacity of these new facilities have been chosen with a strategic rationale. Pellet Plant: The 6 mtpa pellet plant at Jamshedpur will enable Tata Steel to use extra-fine iron ore as a blast furnace feed after beneficiation rather than scarcer forms of ore, increasing the percentage of agglomerate in the blast furnace burden to 85%. Coke Oven Batteries: Prices for raw materials, including coke, have been rising fast and becoming increasinglyTop: LD #3 plant under construction, Jamshedpur. Middle: ‘I’ Blast Furnace underconstruction, Jamshedpur. Bottom: Construction in progress at Dhamra Port.
  21. 21. volatile, so the Company has found it necessary to venture (JV) between Tata Steel and Tata Power thatshield itself against these trends by augmenting its ensures the expanded facilities will have a reliable,in-house coke making capacity. There is a welcome low-cost supply of power. The balance of theadditional benefit, in that the process gas produced requirement will be met by additional purchases fromfrom the new coke batteries will be able to meet the the grid. Jamshedpur’s power distribution system isgas requirements of the pellet plant and TSCR. also being suitably upgraded.‘I’ Blast Furnace: The ‘I’ Blast Furnace, with a capacity Utilities & Other Facilities: Tata Steel has also embarkedof 3.05 mtpa, will be the largest blast furnace at on a programme of upgrades to the existing facilitiesJamshedpur. The furnace will achieve a new scale of at Jamshedpur in order to increase the efficiency. Thisefficiency, contributing significantly to the Company’s programme will entail work on the LD facility, the rawefforts to minimise the environmental impact of materials handling systems and the utility & waterthe additional capacity. The furnace’s construction management systems at both Jamshedpur and theschedule is tight, but the Company can draw upon iron ore mines.the expertise gained through the construction of the‘H’ Blast Furnace, which was commissioned in 2008. Pollution Control: Some of the older production units at Jamshedpur will be retrofitted with high-efficiencyPower Supply: The increase in the Jamsehdpur plant’s dust extraction units, while others, such as the No. 3power requirement caused by the expansion will be Coke Oven Battery and Blast Furnaces ‘A’, ‘B’, ‘D’ & ‘E’,partly met by Industrial Energy Limited, a 24:76 joint will either be phased out or retired. Riversdale Mining Limited – Coal Project probable mineral reserves of 64.1 million tonnes and On 14th April 2010, a formal groundbreaking a production of 4 mtpa of sinter fines is expected ceremony was held at the Benga Coal Project to commence from Q3 2011. In May 2010 Tata Steel in the presence of the President of the Republic entered into a letter of intent to subscribe to 14.285 of Mozambique, His Excellency Armando Emílio million shares in the company at C$ 1.40/share for Guebuza. The ceremony followed a series of an aggregate price of C$ 20 million. If the offering is milestones already achieved by the Company. completed, Tata Steel’s stake would increase to 27.4% Tata Steel has enhanced its holding in Riversdale from its current holding of 19.65%. Mining Limited (RML) to 21.2% and has a 35% equity holding with 40% offtake rights in Riversdale Dhamra Port Company Limited Mozambique. Dhamra Port Company Limited, a 50:50 JV between Tata Steel Limited and Larsen & Toubro, New Millennium Capital Corporation is developing a deep-draught port under a (NML)– Iron Ore Project concession agreement on a Build, Own, Operate, On 25th February 2010, New Millennium Capital Share and Transfer basis. The port will provide Corporation (NML) approved the outcome of a Tata Steel with cost benefits by integrating its feasibility study to develop its 100%-owned Direct raw materials logistics. It will start commercial Shipping Ore properties. The project has proven and operations by August 2010. 21
  22. 22. Improvement Initiatives across the Tata Steel GroupDuring the last fiscal year, the Tata Steel Group (TSG) undertook targeted improvementinitiatives that helped it to deal with the impact of the economic turbulencestrategically and effectively.> C U R R E N T I N I T I AT I V E S TA K E N A N D T H E I R I M PA C TCUSTOMER FIRST PROGRAMME AT TATA STEEL EUROPE Action: 11 industry-focused sectors were identified namely aerospace, automotive, construction, consumer goods, energy and The Task: power, materials handling, packaging, rail, To create a single security and defence, shipbuilding and global strategic engineering. The activities included: marketing team with a goal to become the • Categorising customers to ensure the right “best supplier to best level of focus and developing account plans customer” and deliver for the highest opportunity customers. profitable growth. • Creating group-wide key performance indicators for marketing & sales, implementing a cross-Tata Steel Europe (TSE) customer satisfaction programme and developing a single products and services catalogue. Result: Around 100 people across TSE’s sales & marketing team worked on the first phase which was completed in February 2010. Subsequent phases are now in progress, which include developing 3 to 5 year plans for each sector, identifying initiatives for executing these plans, identifying quick wins and developing a customer satisfaction tool. Product catalogues have been developed and high-level metrics have been defined. 22
  23. 23. FINANCING INITIATIVE AT TATA STEEL INDIA Action: In early 2008, Tata Steel Limited had embarked on its expansion plan to raise the steelmaking capacity of its The Task: Jamshedpur Works from 6.8 mtpa to 9.7 mtpa to fulfil the Making available growing demand of the Company’s customers. In the midst financing for of its expansion plans, the global steel industry was adversely implementation of affected by the global economic crisis. The Company acted the value-accretive swiftly to counter the credit squeeze by engaging with its brownfield expansion relationship bankers in India and exploring opportunities in the project of the Company international capital markets to finance this project. at Jamshedpur amidst the global economic crisis. Result: There was tremendous support from the Company’s relationship banks who along with a few other large banks completed the Rupee Term Loan syndication for the Project which was oversubscribed by almost 2 times. The syndication process for the financial closure of the 2.9 mtpa expansion project was completed in March 2010 through a Rupee financing of US$ 2.1 billion on a project finance basis and long tenor external commercial borrowings from export credit agencies of € 335 million. The Company also raised equity of US$ 500 million through Global Depository Receipts listed on the London Stock Exchange which helped in capitalising the Balance Sheet and to enable deployment of funds in the ongoing expansion at Jamshedpur. The financing risk of the project is now entirely mitigated and progress of the project is on track for completion in 2011-12. SOURCING EXCELLENCE THROUGH STRATEGIC INITIATIVES AT TATA STEEL INDIA Action: In the face of high raw materials price volatility and an overall trend of rapidly increasing prices, the Procurement Division of Tata Steel India focused its efforts on keeping these trends in The Task: check by leveraging long-term contracts and relationships, and on To keep in check minimising risk by hedging and through various other strategic price rises, limit price volatility sourcing tools, including innovations and improvement initiatives and eventually using Total Quality Management precepts. control costs. Result: As a result of these focused strategies, the Division achieved a savings of Rs. 725 crores in FY 10, comprising Rs. 275 crores through strategic initiatives and Rs. 450 crores in price reductions, which were primarily captured in H1 FY 10. 23
  24. 24. Improvement Initiatives across the Tata Steel Group (cont’d)Considerable progress has been made in strengthening the work of the PerformanceImprovement Teams (PITs) charged with improving manufacturing processes. At the moment,17 of these teams are operating across the Tata Steel Group and initial estimates indicate thevalue of PIT-facilitated projects being undertaken in FY 11 to be more than £ 110 million.Here are some of the key PIT improvement initiatives that have been launched across the Group. > C U R R E N T I N I T I AT I V E S TA K E N A N D T H E I R I M PA C TIRONMAKING GROUP STEELMAKING GROUP• Usage of cheaper coals (LCCS) in the coke making • Increasing the number of tuyeres at both IJmuiden blend increased to an all-time high of 41%, 33.6% and Port Talbot from 4 to 6 is improving the yield and 29% this year at IJmuiden, Port Talbot and from the BOS vessels. The changing of the tuyere Scunthorpe, compared to earlier rates of 13%, 20% design at the BOS converters at IJmuiden to bottom and 8% respectively. stirring is bringing benefits through improved converter life and yield.• 2 blast furnaces at IJmuiden and Port Talbot were salamander tapped as part of temporary • Improved fleet management systems and the blow-down due to the contraction in market introduction of ladle coordinators helped increase demand. This process is useful in reducing the risk the life of steel ladles from 110 heats in 2008 to of hearth failures while still allowing quick restarts. 120 heats in February 2010 at Port Talbot.• The usage of iron-rich steelmaking waste reached • LD #1 in Jamshedpur achieved its highest ever record levels of 164 kg/tcs and 143 kg/tcs during vessel life of 5,202 heats in November 2009, thus the year at Port Talbot and Scunthorpe respectively, saving on the cost of relining the vessel; LD #2, at compared with baseline usage of 128 kg/tcs and Jamshedpur achieved an increased average casting 72 kg/tcs. speed of 1.19 m/min from 1.17 m/min year-on-year after implementing a shop tracking system learnt• As a result of shared best practice from Corus’ from IJmuiden. Scunthorpe and Teesside plants, the number of coke ovens in Batteries 5, 6 and 7 at Jamshedpur • Learnings achieved through the PIT process that were subject to down-time during the year fell enabled Vessel 1 at Scunthorpe to achieve its to zero from 48 in 2008. highest ever vessel life of 6,153 heats in January 2010, thus saving the cost of relining the vessel.• The slag volumes at the Port Talbot blast furnaces The number of tuyeres at Scunthorpe was were reduced from the initial baseline of 245 kg/ increased from 3 to 4, improving the yield from thm to 221 kg/thm in FY 10. the BOS vessels. Team: Ashok Kumar, Chief (IMTG), Tata Steel India; Luc Team: Pieter Broersen, Works Manager, Corus Strip IJ; Bol, Works Manager, Corus Strip IJ; Harry Pronk, Works Manager, Corus Strip IJ; David Wilcox, Works Manager, Ian Philips, Works Manager, Corus Strip Port Talbot; Kim Corus South Bank Coke Ovens & Shapfell; David Collins, Southward, Works Manager, Corus Scunthorpe Works; Works Manager, Corus Scunthorpe Works. Debashish Das, Chief LD #1, Tata Steel Jamshedpur. 24
  25. 25. FLAT ROLLING GROUP• Based on learnings from Jamshedpur and facilitated through the PIT, the Hot Strip Mills at IJmuiden and Port Talbot have been able to increase their coil weights from 20.2t to 21.7t and from 19.0t to 20.6t over the period April 2008 to March 2010, achieving significant fixed cost reductions.• The Hot Strip Mill at Jamshedpur successfully implemented a planned maintenance schedule that was followed at IJmuiden. This initiative, coupled with back-up roll changes, resulted in a higher number of net operating hours.• The Cold Rolling Mill at Jamshedpur achieved zero roll failures after implementing mill and roll shop practices learnt from Corus plants.• Port Talbot reduced the electricity consumption of its HSM from baseline 92 kwh/t to 88.5 kwh/t in FY 10. Team: Ernst Hoogenes, Director Manufacturing, Corus Packaging Plus; Govert Koclelloren, Works Manager, Corus Strip IJ; Stephen J George, Works Manager, Corus Strip Port Talbot; Pieter van Tongeen, Works Manager, Corus Strip IJ; Stuart Wilkie, Works Manager, Corus Packaging Plus Trostre.LONG ROLLING GROUP• An energy saving campaign was rolled out and various initiatives taken across the Sections Mills in TSE resulted in 12% year-on-year savings across all section mills.• The Hayange Rail Mill in France is developing the capability to produce 108-metre rails through sharing experience with Scunthorpe’s Medium Section Mill.• There was an increase in yield at the Teesside Beam Mill and improvement in yield across plate mills of Scunthorpe and Dalzell. Team: Sean Lyons, Director Manufacturing, Corus Scunthorpe Works; Simon Beaumont, Manager, Teesside Beam Mill; Richard Sims, Manager, Plate Mill Scunthorpe; Mohan Lal, Chief Long Products, Tata Steel Jamshedpur. Top: The Training Centre, IJmuiden, the Netherlands. Middle: Steel Works in Port Talbot, UK. Bottom: Cold Rolled Steel produced at the Jamshedpur Steel Works.
  26. 26. Corus’s Continuous Annealing Process Line. TATA Steelium is the world’s first branded Cold Rolled Steel. Tata Steel Europe has been manufacturing highway barrier systems for the UK’s major road networks for over 40 years.> A P R O D U C T P I O N E E RThe Company has always placed great emphasis on understanding the nuances ofcustomer needs at individual, corporate and industry levels. This continued focus ondeveloping engineering solutions helps maintain its position as a product pioneer. TATA Wiron was supplied for the Delhi Metro, India. Tata Steel Europe’s steel plate was used to build the world’s first TATA Wiron was used in Suvarnabhumi Airport, Bangkok, Thailand. wave farm in Portugal. Tata Steel Europe was the first company in Europe to manufacture rail for high speed lines.
  27. 27. Product PortfolioOver the years, the Tata Steel Group has placed a continuous emphasis on improving processes,with a view to consistently increasing efficiencies, enhancing quality and thereby achieving betterperformance benchmarks in all areas. The Group’s brand building endeavours have always beendirected at building assurance, reliability and value creation for products in every segment. > MEETING CUSTOMER NEEDS ACROSS SEGMENTS AUTOMOTIVE The Tata Steel Group supplies allCONSTRUCTION major global vehicle manufacturers.From helping to build the world’s most impressive buildings to providing the In addition to supplying a wide rangemetal and expertise for infrastructure projects, Tata Steel has the products and of products, it also delivers servicesservices to meet the needs and standards of the global construction sector. including involvement at the pre-design phase in order to optimiseEnd use: Designing solutions to serve all sectors including residential, production performance at itsnon-residential and infrastructure, including applications such as structural customers’ factories.steelwork and building envelopes (cladding and roofing). End use: Body-in-white, closures,Brands: Advance® Structural sections, Celsius® 355, Hybox® 355, Bi-Steel, chassis and suspension, seating andComFlor®, Slimdek®, Corus Solutions, Catnic, Kalzip, Bor Lor Sor, Tata Shaktee, interior, power train wheels and tyreTata Tiscon, Tata Tubes, Tata Structura and Tata Wiron. bead wire. Brands: HyperForm® - advanced Dual Phase steels, Magizinc Auto®, ZnX Boron®, Vegter Model®, Vegter Lite®, Tata Wiron, Tata Bearings and 28
  28. 28. AEROSPACETata Steel Europe supplies high CONSUMER GOODSintegrity steels to major global Tata Steel manufactures andcommercial and defence aerospace processes steel for a wide rangeprogrammes. These range from high of customers across the consumer MATERIALS HANDLINGstrength, high integrity structural goods sector worldwide. Its product Tata Steel delivers a multi-productsteels to high temperature alloy and service solutions range from solution to the global materialsand stainless steels. The Company hot rolled coil through to high-gloss handling sector. It managesis involved throughout the supply pre-painted perforated blanks. the complexity of products andchain, from materials selection services it supplies via multipleand processing to the provision of End use: Domestic appliances, supply chains, through anexpertise during development of lighting, furniture and office extensive global network.engineering processes. equipment, racking and shelving, battery cases, bake-ware, End use: Construction andEnd use: Landing gear, engine and enamel-coated applications, earth-moving, forklift trucks,rotor shafts, engine fan casings and decorative pre-finished metals mining (e.g. roof supports, drills,blades, structural pylons, slat and plus many others. crushers, screeners and conveyors),flap tracks. High integrity gear steels cranes, trailers, forestry equipmentfor planes, helicopters and motor Brands: Motiva®, Advantica®, and agricultural equipment.sport applications. Colorcoat®, Ymvit®, Ymagine®, Tenform®, HILUMIN®, HILAN®, Brands: Tenform XK, Tenform XF,Brands: Jethete M152 and Jethete HIBRITE®, NICOR®, Tata Steelium Ympress, Ympress Laser, Abrazo,M160. and Actis, Durbar and RQT. 29
  29. 29. Product Portfolio (cont’d) > MEETING CUSTOMER NEEDS ACROSS SEGMENTS ENGINEERING General Engineering Tata Steel manufactures a range of steel products, encompassing hot rolled and cold rolled sheets, wire rod and wire, sections, plate, bearings and tubes, which RAIL serve a multitude of small engineering Tata Steel provides a wide range companies in Europe, South Asia and South of products and infrastructure East Asia.ENERGY AND POWER services to the internationalThe Tata Steel Group supplies a railway industry. The wide Brands: Tata Steelium, Tata Wiron andbroad portfolio of products and spectrum of track and traffic Tata Bearings.services to the energy and power conditions in the modern railwaysector leveraging its long-standing environment is matched by Tata Agricultural Tools &technical expertise. It also plays Steel’s comprehensive range of Implementsa leading role in the emerging rail section sizes, steel sleeper Tata Steel manufactures a range of highrenewable energy market, which is products and other specialised quality agricultural implements making itcritical to building a greener planet. track components. the first choice in India’s rural markets. Its wire products find their way into farming,End use: Submerged arc-welded End use: Rails for high-speed poultry and fencing applications.pipe for the global oil and gas lines, conventional and heavyindustry, plate for use in wind loaded tracks, special rails for Brands: Tata Agrico and Tata Wiron.turbines, structural systems for metro and tramways, as well asthe solar power industry, plus for switches and crossings. Steel Engineering Services, Plant &a range of structural, electrical sleepers and track accessories, Equipmentand speciality engineering steels modular platforms and tuned A multi-disciplinary engineering approachused in power generation and dampers for noise reduction. for the design, manufacture and supplytransmission. of high precision equipment is offered Brands: HPrail™, Railcote™, to various industry sectors. ServicesBrands: Durehete, Esshete, Silent Track™, Sogenox™, range from routine testing, erection andJethete, Inject and Tata Wiron. Sogeplex™ and Tata Wiron. commissioning to full business consulting. 30
  30. 30. SECURITY AND DEFENCE In a world where protecting PACKAGING people, assets and infrastructure Tata Steel supplies a range of is increasingly difficult, improved products in both the consumer measures are required to safeguard and industrial packaging sectors. society. Tata Steel Europe suppliesSHIPBUILDING In the consumer packaging sector, a number of specialist solutions toTata Steel Europe offers a it provides high quality steels address this challenge ranging fromcomprehensive range of products for the worldwide can making products that provide robust physicaland services to the shipbuilding industry including tinplate, security measures and protectindustry. Its exemplary quality ECCS and Protact® polymer- against bomb attacks to radiationsystems ensure it has the approval coated steel. detection systems.to supply all major classificationspecifications. End use: Consumer: Light End use: Blast protection structures, metal packaging for food and blast containment structures, physicalEnd use: Wide range of vessels beverages cans as well as for paint perimeter security applications,including cruise liners, offshore and aerosols. Industrial: Steel for redeployable vehicle barriers,support vessels, ferries, container drums, industrial bulk containers bollards, walls and security solutionships and aircraft carriers. and gas bottles. designs.Brands: INSTALL+ and INFIRE. Brand: Protact®. Brand: Bi-Steel. 31
  31. 31. Research & DevelopmentResearch & Development (R&D) activity within the Tata Steel Group takes place in 5 majorcentres namely, the IJmuiden Technology Centre (the Netherlands), the Swinden TechnologyCentre (United Kingdom), the Teesside Technology Centre (United Kingdom), the AutomotiveEngineering Group (United Kingdom) and the Jamshedpur R&D Centre (India). These centreshold just over 1,000 employees globally. > IMPROVING PROCESSES TO ENHANCE EFFICIENCIESIJMUIDEN TECHNOLOGY CENTRE, established in 1996 to build a technical bridge betweenTHE NETHERLANDS Corus and its automotive sector customers. Its keyThe IJmuiden Technology Centre (IJTC) is located on the focus is on cost-effective light weighting, to keepsite of the Corus steel works in IJmuiden and focuses steel positioned as the automotive material of choicepredominantly on process and product research for in the transition to a low carbon economy. It employsstrip products and its application in the automotive automotive specialists using CAD design, structuraland packaging sectors. In addition, the Ceramics and formability CAE, manufacturing feasibility,Research Centre contributes to the availability of high cost estimation and knowledge-based engineeringtemperature installations by developing “value in use” techniques to service the automotive, construction,refractory solutions. materials handling and defence market sectors.SWINDEN TECHNOLOGY CENTRE, JAMSHEDPUR R&D CENTRE, INDIAUNITED KINGDOM The Jamshedpur R&D centre in India was established inThe Swinden Technology Centre (STC) in Rotherham 1937 and is one of the oldest industrial R&D centres inmainly focuses on product research and applications the country. Since its inception, it has played a pivotalresearch for the transport, building and construction sectors. role in the development of steel products and processProcess research is undertaken for the mills operations routes that have given the Company a competitiveprimarily concentrating on environmental research. advantage in local and global markets. Currently the centre employs 145 officers. The innovative natureTEESSIDE TECHNOLOGY CENTRE, and high quality of their work is reflected in 42 filedUNITED KINGDOM and 36 granted patents during the past year, as wellThe Teesside Technology Centre (TTC) in Grangetown, as the publication of 56 papers in top internationalCleveland operates as a satellite focusing on process peer-reviewed journals.and long product research. A significant capability ofthis centre is the 8 tonnes heavy pilot plant facility with KEY RESEARCH THEMESan arc melting furnace and steel casting capability. Raw Materials Raw material costs play a key role in the competitivenessAUTOMOTIVE ENGINEERING GROUP, of the steel industry. Various R&D programmes areUNITED KINGDOM underway to address the issue of escalating rawThe Automotive Engineering Group (AEG) was material prices. Our research seeks to maximise the use 32
  32. 32. of raw materials from captive sources. These projectsinclude new technology to produce low ash clean coal,beneficiation of low grade iron ore and plant rejects toproduce concentrates and a new coal agglomerationtechnology to increase the use of low-cost non-cokingcoal for coke production.Cost and ProductivityR&D’s commitment towards continuous improvementand its development of cutting edge technologyhas supported our Company to become one of thelowest cost steel producers worldwide. The manyactivities in this field include research on agglomerateschemistry, blast furnace burden distribution, integratedthrough-process modelling, reduction in zincconsumption during tube galvanising and many more.Market and New Products4 research groups in India and more than 10departments in Europe are actively engaged indeveloping new products. For example, their researchoutput to cater to the needs of the Automotive sectorinclude the development of advanced high strengthsteels, new forming techniques, new and improvedjoining techniques, innovative coatings, improvedfatigue life of components, etc.Energy and EnvironmentTata Steel’s R&D centres conduct many programmesto improve the life cycle and sustainability of theCompany’s products. These include projects to reduceenergy consumption, CO2 and other emissions. Onecurrent example is the construction of a pilot plantto trial the new HIsarna iron making process at Corus’IJmuiden in the Netherlands. This new process,which was developed jointly with partners in theULCOS consortium (www.ulcos.org), is expectedto drastically reduce the energy consumption andCO2 emissions associated with the production of ironfrom iron ore. Top: Saroj K. Jha, Scientific Assistant of R&D, India doing a maceral analysis of Above:Middle: Dr. Centre, IJmuiden, the Netherlands. Middle: Port Talbot,colleagues, coal. The Training Tapan Kumar Rout and Marjon Zonneveld, R&D UK. Bottom: Coldthe Netherlands. Bottom: Ferro Chrome at Bamnipal Plant of Ferro IJmuiden, Rolled steel produced at Jamshedpur. Alloys & Minerals Division, India.
  33. 33. The Vitality Centre, IJmuiden, the Netherlands.Tata Steel Europe’s‘Silent Track’ solutionis helping to cut noisepollution on railwaytracks in Europe. NatSteel Holdings was one of the regional pioneers in radiation detection for steel scrap operations. > A C O R P O R AT E C I T I Z E N Undeterred by the economic crisis, the best working practices in health, safety and corporate citizenship continue to be of the utmost importance to us. We have maintained our focus and introduced specific initiatives in all these areas. Over 18 million tonnes of residual materials were internally reused through Tata Steel’s processes, successfully replacing primary raw materials and reducing the overall CO2 emissions. ‘Save our Earth’ programme at Tata Steel Thailand. NatSteel Holdings ensures that it recycles 90% of its steel.

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