Steel pricing will depend upon exchange rate and international demand, says TV Narendran, MD & CEO of Tata Steel. Safeguard duty by the government has helped stabilising demand. He expects steel prices fall by Rs 1,000-1,500 per tonne this quarter. Talking to CNBC-TV18’s Archana Shukla, Narendran says that he is positive on steel demand, but not on prices. He is positive that steel industry will pick-up once India clocks in 7-8 percent gross domestic product (GDP) and government starts investment in infrastructure. Tata Steel has managed to record 20 percent earnings before interest, tax, depreciation and amortization (EBITDA) margin in last two quarters despite imported iron ores. The company is prepared to ride the cycle down by managing cost, Narendran says adding that the company is better places than its competitors. The company has received approvals for iron ore mines in Orissa till 2030 and is currently ironing issues in Jharkhand. The company’s demand is being taken care of currently, he says. On the company’s Kalinagar plant, he says that strong marketing franchise will help production. The plan is to start exports soon after domestic demand becomes visible, he says. Positive Europe EBITDA margins were driven by Netherlands business, he says adding that the Europe market is important for structural growth. The company does not have any plans to sell stake for debt reduction, he says. “We have headroom in debt as we largely used internal accruals for Kalinagar plant,” he adds. The company has managed nearly Rs 6000 crore this year. Tata Steel is looking to sell its long production business as the main focus in UK is on strips, he says. After a failed due diligence with a buyer, the company is looking at options. The company is also focusing on ramping up its B2C business 0- services & solutions segment - in value-added steel portfolio to 30 percent from the current 1-2 percent in five years.
Source : metaljunction.com
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