Latest news with #Chandrasekaran
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Business Standard
3 days ago
- Business
- Business Standard
Port Talbot's green furnace marks end of costly firefighting for Tata Steel
In July 2022, Tata Group Chairman Natarajan Chandrasekaran told the Financial Times that transition to green steelmaking hinged on the British government's support. Talks had been going on for two years, and the writing was on the wall: Without a deal within the next 12 months, the plant, Port Talbot, would close down. Port Talbot, Tata Steel's upstream steelmaking facility in South Wales, had largely been a drag on the company's bottom line since it acquired Anglo-Dutch steelmaker Corus in 2007. Government support was crucial as cash flows from the business fell short of funding the capital-intensive transition. Cut to July 14, 2025. An impassioned Chandrasekaran, while flagging off the construction of the electric arc furnace (EAF) at the plant, spoke of the ups and downs the site had faced. 'Many people, many naysayers probably thought that this day would not come. And that's why it's important,' he said. 'We got a job in hand, we got to execute. We are super committed to this project. That's why I wanted to be here today to show my personal and the Tata group's commitment.' Meltdown to makeover The EAF at Port Talbot brings the curtains down on carbon-intensive blast furnace (BF) steelmaking at the site and paves the way for low-carbon steel production. The heavy-end assets were at the end of life and carbon costs on the blast furnace process were high. The transformation, however, impacts close to 2,500 jobs, even as it secures 5,000. The BFs were decommissioned by the end of September 2024, a first on such a scale in the history of the company. Last week, as construction of the EAF kicked off, the steelworkers' union described it as a 'bittersweet' day. While it looked at it as a consequence of the devastating closure of the blast furnaces, it also acknowledged that a future for Port Talbot steelmaking was now secured. Getting to this point wasn't easy. From securing union support to navigating government negotiations, it was a web of complex stakeholder management. Years in the making The transformation to low-carbon steelmaking involves an investment of £1.25 billion. The UK government is backing the project with £500 million — the funding came through after a stretch of political churn in Westminster. Discussions for the support began under Prime Minister Boris Johnson. Till the time the deal was signed and sealed, the UK had cycled through another three prime ministers. In September 2023, Tata Steel and the Rishi Sunak-led Conservative UK government had agreed on a grant of £500 million. But in the July 2024 general elections, the Labour party landed a historic win, putting a question mark on the funding and the future of Port Talbot. The lifeline When Tata Steel acquired Corus in a £6.2 billion deal in 2007, it gained two key steelmaking sites: Port Talbot and IJmuiden in the Netherlands. The latter has been largely self-sustaining, whereas the structurally weak UK operations demanded substantial capital. Tata Steel disclosed in January 2024 that since the Corus acquisition, it had put in £6.8 billion in the UK towards improving steelmaking operations and processing sites, covering financial losses, pension restructuring costs, and providing additional capital support to service Tata Steel UK's share of debt. The closure of heavy-end assets at Port Talbot is expected to bring down the losses. The 3.2 million tonne (mt) EAF will be commissioned by the end of 2027. Downstream customers are currently being serviced with slabs from India, the Netherlands, and even the open market, reducing fixed cost. Arresting the drain The task before Tata Steel's management is clear, and the goal firmly defined. At its annual general meeting on July 2, Chandrasekaran told shareholders that the company was working towards becoming profit after tax (PAT)-positive. 'Losses in the UK will be wiped out. And going forward, this year or the next, it will become PAT-positive,' he said. The first step, however, could be to make it positive or neutral in terms of earnings before interest, tax, depreciation, and amortisation (Ebitda) this year. In FY25, UK Ebitda loss stood at £385 million. In a credit rating report dated June, Icra noted: 'Within the European operations, the UK assets were a weak link in terms of their cost position.' However, the EAF transformation will significantly improve the cost position of the UK asset and will, hence, arrest the drain in the company's consolidated earnings, it said. 'The UK operations have cost Tata Steel a lot over the years — in terms of management bandwidth and financial capital,' said Tushar Chaudhuri, research analyst, PL Capital (Prabhudas Lilladher). 'The leakage to earnings in the UK that impacted Tata Steel's consolidated balance-sheet should now stop. And the Netherlands operations are expected to perform much better this year, post the relining of the blast furnace. Over the next two quarters, Tata Steel's European operations should be Ebitda-positive.' Dutch support In the UK, Tata Steel is already on the road to decarbonisation. In the Netherlands, the plans are still in motion. The plan for the Dutch operations is to replace one of the two blast furnaces and coke ovens with direct reduced iron and EAF-based production by the end of the decade. Meanwhile, external vulnerability has prompted Tata Steel to review costs across regions as part of a transformation programme: A multi-pronged approach of maximising production efficiencies, lowering fixed costs, and optimising product mix and margins. In the Netherlands, Tata Steel plans to cut 1,200 jobs in phases as part of this exercise. But the cost-cutting drive is not just limited to the high-cost European outposts. Forging ahead Over the next 12 to 18 months, Tata Steel has set a cost takeout target of ₹11,500 crore across regions: India, the UK, and the Netherlands. In FY25, the cost takeout had stood at ₹6,600 crore versus FY24 levels across units. Rising geopolitical tensions, volatile steel prices, and impending auction of legacy iron ore mines in 2030 are among the challenges that are largely beyond Tata Steel's control. So it is focusing on what it can control — resetting its cost structure. On the cost takeout, Amit Lahoti, senior research analyst — Institutional Equities at Emkay Global, however, said, 'It is difficult to assess how much of the cost takeout will ultimately flow to the Ebitda. There are too many moving parts, such as steel prices and market conditions.' The company will also benefit from the expanded 5 mt capacity at Kalinganagar, Odisha, adding to its top and bottom line – with some of the additional volumes flowing in FY26. As things stand, the years of struggle with European business appear to be fading, new capacity is set to generate cash, and efforts to rein in expenses are gaining momentum. Could this be a new chapter in the century-old steelmakers' story?
Indian Express
5 days ago
- Business
- Indian Express
Okay, Tata: How Mamata govt is trying to put Nano in the rearview mirror
AS SHE seeks to recast her government's image as pro-industry, West Bengal Chief Minister Mamata Banerjee could not have chosen a more striking photo-op than her meeting with Tata Group Chairman N Chandrasekaran. The July 9 rendezvous, its photos widely shared, was the first such high-level meeting between Banerjee and a Tata executive since she led the Trinamool Congress agitation that drove the Tata Nano project out of Bengal in 2010, and rode the momentum to power. The focus on industry, and by extension jobs, reflects the political reality on the ground, with the BJP with its 'double-engine growth' narrative snapping at the heels of Banerjee's bid for a fourth consecutive term in power. Since Banerjee's meeting with Chandrasekaran, the Trinamool Congress government has announced a 'Business and Industry Conclave' later this year, while another Bengal Global Business Summit (after the one held in February this year) may be on the cards before the 2026 Assembly elections. Banerjee's meeting with Chandrasekaran, which lasted 45 minutes, was followed by messages by the TMC that underlined the distance the CM had travelled from the massive land acquisition agitation she led, while in the Opposition, against the Nano project. The party said the dialogue between Banerjee and the Tata Chairman was centred on West Bengal's growth. 'They talked about deepening the Tata Group's presence in the state, underscoring Bengal's emergence as a preferred destination for forward-looking industry leaders,' the TMC said. As per government sources, the overture to the Tatas had been in the making for several months. The CM first invited Chandrasekaran for the February Bengal Business Global Summit. While he could not make it, the two had an encouraging discussion on the eve of the summit. Later, at the summit's inaugural ceremony, Banerjee mentioned her conversation with Chandrasekaran. 'He assured us that they want to invest more and more in Bengal. And he will come to Bengal very soon and discuss (things in detail).' Currently the Tatas' presence in West Bengal is largely via Tata Consultancy Services, which has more than 54,000 employees across the state and is planning a 20-acre campus in the Bengal Silicon Valley Hub, located in New Town. The Tata Group also has investments in the hotel sector in the state. To a lesser degree, Tata Steel has a diversified presence with more than 11,100 employees, while Tata Hitachi has a plant in Kharagpur. Most of these plants date back to the Left time, with some expansions seen under the TMC regime. Amit Mitra, the Chief Financial Adviser to the CM, announced last week plans for a 'Business and Industry Conclave' in the state after Durga Puja. 'The State-Level Investment and Synergy Committee has been tasked with preparing a roadmap for the conclave,' Mitra, also the former state finance minister, said. The state government had announced the formation of this Committee ahead of the Global Business Summit 'in order to facilitate industrial growth and enhance the ease of doing business in the state'. The committee is headed by the Chief Secretary, with units planned in each district. The Bengal government has identified several revenue- and job-generating sectors for its industrialisation push, said Mitra. These include steel, gems and jewellery, Information Technology and related fields, food-related businesses, tourism, textiles and apparel, leather, pharmaceuticals and medical devices. A new pressure point for the TMC government are incidents of rounding up of Bengali migrants across the country as the Centre widens its crackdown against 'illegal' immigrants. The BJP has linked it to the Banerjee government's failure to check the exodus outside the state for work. The change in the messaging of the ruling TMC is stark. It came to power in 2011 riding on not just the Tata Nato agitation but also the anti-land acquisition protest against a pharmaceutical hub in Nandigram. The party's politics was encapsulated by the slogan 'Maa, Maati, Manush', first raised during the Singur movement, signifying its commitment to the disadvantaged and minorities above all. In March this year, the Banerjee government passed the Revocation of West Bengal Incentive Schemes and Obligations in the Nature of Grants And Incentives Act, which took away all incentives granted to industries since 1993, with retrospective effect. The legislation said, 'The object of this Act is to make state finances available for various social welfare schemes formulated and under operation in the state of West Bengal… and not to expend such finances to provide special assistance, financial incentives, state support, benefits, concessions or special privileges at the cost of the marginalised.' An official said the incentives were revoked as the state government 'was going to introduce a new industrial policy'. Sources said the policy was in the drafting stage. An industrialist said they are hoping that this new policy is unveiled soon, and that it smoothens the process of getting licences. 'We basically want a one-window system. The administration should also take strong steps against extortion and local hooliganism.' However, some like cement maker Nuvoco Vistas Corporation are not impressed. Last month, it informed the stock exchange that its wholly owned subsidiary NU Vista had filed a writ petition in the Calcutta High Court challenging the constitutional validity of the Act. Nuvoco said incentives of Rs 2,427.14 crore and Rs 2,300.44 crore to be received by Nuvoco and NU Vista were likely to be impacted because of the Act. During a recent visit to West Bengal, Union Home Minister Amit Shah noted the 'poor state' of industry in the state, saying: 'At the time of Independence, Bengal's share in India's industrial production stood at 30%… Today, it is down to a mere 3.5%… In 1960, Bengal's per capita income was 105% of Maharashtra. Now, it's not even half… I want to ask Mamata Didi and the Communists (the Left was in power for 34 years, before being unseated by the TMC), who is responsible for this?' Shah also criticised the Congress, which ruled the state for a long time. The BJP later posted on X: 'Under Mamata Banerjee, West Bengal is sinking economically: GSDP growth is below the national average (4.3%), per capita income is 20% lower than the national average, GDP share dropped from 6.8% in 1990-91 to 5.8% in 2021-22, female labour force participation is lower than the national average, the Gross Enrolment Ratios, at both Higher Secondary (2015-16) and Higher Education (2021) levels, are less than the national average. The state has a high fiscal deficit, a high debt-to-GDP ratio and a higher revenue deficit than the national average.' Hitting back, Banerjee accused Shah of 'speaking a garbage of lies'. 'He claimed our state is zero in industry, but we are No. 1 in the MSME sector. He claimed we could not build roads, but we are No. 1 in that,' she said. A recent working paper by the Economic Advisory Council to the Prime Minister (EAC-PM) presented a mixed picture for West Bengal. While its share in India's GDP nearly halved from 10.5% in 1960-61 to 5.6% in 2023-24, the state has brought down its fiscal deficit – from around 4.24% of the Gross State Domestic Product (GSDP) under the Left, to about 3.0 % by 2018-19. During the Covid pandemic, even as economic conditions were uniformly impacted, the Bengal government managed to not let the deficit balloon, and it stood at 3.26 % of the GSDP by the end of the 2022-23 financial year. In her Budget speech this year, West Bengal Finance Minister Chandrima Bhattacharya said, 'West Bengal's GSDP grew by 6.8% in 2024-25, outpacing India's overall growth rate of 6.37%. The industrial sector registered a growth of 7.3%, significantly higher than India's 6.2%, while agriculture and allied sectors grew by 4.2%, compared to India's 3.8%. The services sector is also growing faster, at a rate of 7.8%, surpassing India's 7.2%.' About the Banerjee government's industry push, CPI(M) Central Committee member Sujan Chakraborty said, 'Mamata Banerjee knows the people's anger is increasing. Now, she is trying to rectify by invoking 'Bengali' sentiments and meeting the Tata Chairman. But, people won't be mollified.' BJP state president Samik Bhattacharya said, 'Mamata Banerjee will not get a chance to do industrialisation. The people of Bengal gave her 15 long years for this and she failed… We have to create an industry-friendly, investment-friendly atmosphere. We have told the industrialists, please wait for a year.'.
South Wales Argus
6 days ago
- Business
- South Wales Argus
Electric arc furnace to be built in Wales by Tata Steel
Tata Group chairman, Natarajan Chandrasekaran, marked the start of this initiative at a groundbreaking event on Monday. This facility is part of a £1.25 billion transformation towards low CO₂ steelmaking, supported by £500 million from the UK Government. The furnace will be commissioned at the end of 2027. Mr Chandrasekaran said: "This is an important day for Tata Group, Tata Steel and for the UK. "Today's groundbreaking marks not just the beginning of a new Electric Arc Furnace, but a new era for sustainable manufacturing in Britain. "At Port Talbot, we are building the foundations of a cleaner, greener future, supporting jobs, driving innovation, and demonstrating our commitment to responsible industry leadership." Business Secretary Jonathan Reynolds said: "This is our Industrial Strategy in action and is great news for Welsh steelmaking backing this crucial Welsh industry, which will give certainty to local communities and thousands of local jobs for years to come. "This government is committed to a bright future for our steel industry, which is why we provided £500 million of funding to make this project possible. "Our modern Industrial Strategy will set out how we'll back the sector even further to drive growth and create well-paid jobs across the country, as part of our Plan for Change." Tata Steel's new electric arc furnace is set to be the largest in the UK (Image: Tata Steel) Secretary of State for Wales Jo Stevens said: "The construction of Tata's new furnace realises the promise we made to the community, while the development of floating offshore wind, plans for a Celtic Freeport and millions more for local regeneration all mean that Port Talbot has a bright future." First Minister Eluned Morgan said: "This is a momentous day for heavy industry in Wales, as the electric arc furnace has secured the long-term future of steel making at Port Talbot. "Seeing spades in the ground today provides a tangible sign of Tata's intention to continue producing steel in the area, an industry which has provided quality jobs to local people for generations." The project will be led by main contractor Sir Robert McAlpine.
Time of India
14-07-2025
- Business
- Time of India
Tata Group Chairman performs ground breaking of 1.25 bn pound green steel project in UK
Tata Group Chairman N Chandrasekaran on Monday held the ground-breaking ceremony at Port Talbot in the UK to kickstart the construction of a GBP 1.25 billion green steel project to cut down carbon emissions by 90 per cent at the site. The company is transitioning from the blast furnace route to the low-emission electric arc furnace process, which will utilise the locally available scrap. " Tata Steel UK today celebrates a historic milestone in its green transformation journey as Natarajan Chandrasekaran, Chairman of Tata Group, joins government ministers at a groundbreaking event for the company's state-of-the-art Electric Arc Furnace (EAF) facility in Port Talbot," the steel player said in a statement. Chandrasekaran was joined by Tata Steel CEO and Managing Director T V Narendran and Tata Steel UK CEO Rajesh Nair, for ground breaking which marks the official start of construction for the UK's largest low-carbon steelmaking facility. This is part of a GBP 1.25 billion transformation to low CO2 steelmaking, supported by a GBP 500 million investment from the UK Government. The joint investment by Tata Steel and the UK Government in green steelmaking at Port Talbot is the biggest in a generation and will secure 5,000 jobs across Tata Steel UK. Live Events The new EAF is set to be commissioned at the end of 2027 and is expected to reduce Port Talbot's carbon emissions by approximately 90 per cent, equivalent to 5 million tonnes of CO₂ per year, and 50 million tonnes over the next ten years. Chandrasekaran said: "This is an important day for Tata Group, Tata Steel and for the UK. Today's groundbreaking marks not just the beginning of a new Electric Arc Furnace, but a new era for sustainable manufacturing in Britain. At Port Talbot, we are building the foundations of a cleaner, greener future, supporting jobs, driving innovation, and demonstrating our commitment to responsible industry leadership." This project is also part of Tata Group's wider investment in the UK, across steel, automotive, and technology among others, which reflects our deep and enduring partnership with this country, said Chandrasekaran, who is also the chairman of Tata Steel. Business Secretary Jonathan Reynolds said: "This is our Industrial Strategy in action and is great news for Welsh steelmaking backing this crucial Welsh industry, which will give certainty to local communities and thousands of local jobs for years to come. "This government is committed to a bright future for our steel industry, which is why we provided GBP 500 million of funding to make this project possible. Our modern Industrial Strategy will set out how we'll back the sector even further to drive growth and create well-paid jobs across the country, as part of our Plan for Change." Secretary of State for Wales Jo Stevens said: "The UK Government acted decisively to ensure that steelmaking in Port Talbot will continue for generations to come, backing Tata Steel with GBP 500 million to secure its future in the town, along with GBP 80 million to support workers and the wider community. Our Steel Strategy will also deliver GBP 2.5 billion of investment to rebuild the UK industry, maintain jobs and drive growth. First Minister Eluned Morgan said: "This is a momentous day for heavy industry in Wales, as the electric arc furnace has secured the long-term future of steel making at Port Talbot. The start of the construction phase is good news for Port Talbot and neighbouring communities, and I'm especially pleased that Tata has committed to employing local contractors and local workers where it can." India-based Tata Steel owned the UK's largest steelworks of 3 million tonnes per annum (MTPA) at Port Talbot in South Wales and employed around 8,000 people across all its operations in that country. To take forward its transition plan, the company shut its upstream operations in a phased manner amid workers' protests and job cuts. At present, Tata Steel UK is using substrate from India and Netherlands operations to service existing customers in the UK. PTI
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Business Standard
14-07-2025
- Business
- Business Standard
Tata Steel begins Port Talbot EAF project as UK backs £500-mn investment
Port Talbot in South Wales – Tata Steel's primary steelmaking site in the UK – is set for a new beginning as the company breaks ground on an electric arc furnace (EAF), signalling a shift towards low-carbon steel production. To mark this milestone for Tata Steel and British steelmaking, Tata Group Chairman Natarajan Chandrasekaran will be joined by UK government ministers at a groundbreaking event scheduled for later on Monday. Chandrasekaran will be flanked by Tata Steel Chief Executive Officer and Managing Director T V Narendran, and Tata Steel UK Chief Executive Officer Rajesh Nair, as they officially break the ground with spades, launching the construction of the UK's largest low-carbon steelmaking facility and marking a shift away from traditional blast furnaces. Government support and job impact The development is part of a £1.25-billion transformation towards low-carbon steelmaking, supported by a £500-million investment from the UK government. The transition secures 5,000 jobs across Tata Steel UK, even as the closure of heavy-end assets is expected to impact 2,500 positions. Leadership emphasises sustainability and partnership In a statement ahead of the ceremony, Chandrasekaran said: 'This is an important day for Tata Group, Tata Steel and for the UK. Today's groundbreaking marks not just the beginning of a new electric arc furnace, but a new era for sustainable manufacturing in Britain.' 'At Port Talbot, we are building the foundations of a cleaner, greener future, supporting jobs, driving innovation, and demonstrating our commitment to responsible industry leadership. This project is also part of Tata Group's wider investment in the UK, across steel, automotive, and technology among others, which reflects our deep and enduring partnership with this country,' he added. UK government hails strategic shift in steelmaking Business Secretary Jonathan Reynolds said, 'This is our Industrial Strategy in action and is great news for Welsh steelmaking, backing this crucial Welsh industry, which will give certainty to local communities and thousands of local jobs for years to come.' 'This government is committed to a bright future for our steel industry, which is why we provided £500 million of funding to make this project possible,' he added. Secretary of State for Wales Jo Stevens said: 'The UK government acted decisively to ensure that steelmaking in Port Talbot will continue for generations to come, backing Tata Steel with £500 million to secure its future in the town, along with £80 million to support workers and the wider community.' 'Our Steel Strategy will also deliver £2.5 billion of investment to rebuild the UK industry, maintain jobs and drive growth,' Stevens added. First Minister Eluned Morgan said: 'The start of the construction phase is good news for Port Talbot and neighbouring communities, and I'm especially pleased that Tata has committed to employing local contractors and local workers where it can.' Mixed reactions as union calls day 'bittersweet' Steelworkers' union Community described the development as a 'bittersweet' day. In a statement, Community Assistant General Secretary Alasdair McDiarmid said: 'This bittersweet day is a consequence of the devastating closure of the blast furnaces, but importantly, a future for Port Talbot steelmaking is being secured. The workforce needs the electric arc furnace project to be both a success and a turning point, and we look forward to playing our part to get the new furnace up and running.' Broader decarbonisation strategy and supply chain As part of Tata Steel UK's broader decarbonisation strategy, the project will also include new ladle metallurgy facilities, infrastructure upgrades, and collaborations with technology providers such as Tenova, ABB, and Clecim. The construction is being led by main contractor Robert McAlpine, supported by a strong regional supply chain that includes Darlow Lloyd & Sons, Mii, Skelton Thomas, Wernick Buildings, Andrew Scott Ltd, and Systems Group, the company said.
