Thyssenkrupp JV to strengthen industry: Tata Steel chairman
Tata Steel chairman N Chandrasekaran on Monday welcomed the definitive agreement with German steel major Thyssenkrupp to create a new joint venture company as a “historic” development that would strengthen the steel industry across Europe and India.
Chandrasekaran was addressing a joint press conference with Thyssenkrupp CEO Heinrich Hiesinger in Brussels after the creation of Europe’s second-largest steel giant after Lakshmi Mittal’s ArcelorMittal in the form of the new JV company was announced over the weekend.
“For Tata, this marks a significant milestone in the history of Tata Steel and the Tata Group. It strengthens and provides scale to our European operations, creates a strong steel enterprise and also helps the Indian operations to grow and address the needs of the Indian market,” he told reporters.
Addressing a question on what the new company, named Thyssenkrupp Tata Steel BV, would mean for Tata Steel employees in India, he described it as a “great development” for all employees.
“We are structurally strong in India, which offers tremendous opportunities as a growing market. This JV creates an opportunity for us to create a good, strong and sustainable footprint in both geographies,” he said.
Chandrasekaran also asserted Tata Steel’s plans to “double down” in India, where the company plans to increase its presence from 13 million tonnes to 25
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million tonnes a year capacity.
In reference to the company’s recent acquisition of Bhushan Steel in India, he indicated that Tata Steel was negotiating another acquisition in India as part of its focus on creating a “strong Indian platform” through Brownfield and Greenfield opportunities.
Tata Steel’s new 50-50 joint venture with Thyssenkrupp involves a total workforce of 48,000 employees, spread across 34 sites, producing about 21 million tonnes of steel a year with revenues of around €15 billion.
As the second-largest European steel company, after Lakshmi N Mittal’s ArcelorMittal, the company has forecast cost savings of between £350 million to £440 million a year as it becomes a “one balance sheet” entity.
“There is industrial logic and strategic rationale behind this merger, which creates a new steel champion in Europe…We are forming something great, which expresses our trust in the successful future for the steel business in Europe,” said Thyssenkrupp chief executive officer (CEO) Hiesinger.