It’s a win-win situation for duo

KOLKATA: The Tata Steel-Corus deal, if successful, will pave the way for the introduction of high-value added products from the Corus basket, It pertains to items in sectors like packaging, construction and automotive. In all the three sectors, the consumption base in India is nearly 30 times smaller than in the developed countries.

For Corus, it also represents the cornerstone of a strategy it decided upon last year — to align and associate with a low-cost producer in a growing economy, as James Leng, Corus chairman, pointed out at a media conference on Friday. Corus has a leading position in construction and packaging in Europe. “We are looking at a market that is poised to grow exponentially,” Philippe Varin, CEO, Corus, said.

Tata Steel MD B Muthuraman also highlighted the growth opportunities in the three sectors when he spoke about the synergy between the two companies. Out of these three sectors, Tata Steel already has made a significant beginning in automotive steel.

The cold rolling mill at its plant in Jamshedpur became operational only in ’00. By ’06, Tata Steel has emerged as a supplier for half of domestic auto industry steel requirements. It has garnered a whopping 50% of automotive steel sales to companies like Maruti Suzuki, Tata Motors, and a host of other NewGen and MNC car manufacturers in the country. Further, 16% of Corus’ business comes from automotive sector. With Corus as co-driver, Tata Steel will get a chance to move its auto steel business into top gear.