Tata Steel, the sixth largest steel producer in the world, has said that during FY08, Tata Steel and Corus jointly have realised synergy benefits of $76 million.
In its annual report 2007-08, Tata Steel chairman Ratan Tata has said, ?Tata Steel has derived the benefits in the area of manufacturing, whereas in Corus, the benefits are from reduction of taxation and in shared services in the area of legal, investor relations etc, in the corporate centre.?
Moreover, joint integration teams formed for key areas have identified synergies worth $450 million and action plan drawn up will ensure that these are realised by the end of March 2010, said Tata. Tata Steel shares on Monday were down 0.98% to close at Rs 644.80 on the Bombay Stock Exchange.
The Tata Steel Group has set itself a target to improve on return on invested capital of its existing assets to 30% from the current 19% over the next 5 years. ?Plans are in place to meet the initial synergy target of $450 million a year.
The group is committed to investing in leading edge technology, process innovation and product development,? said Jean-Sebastien Jacques, group director (strategy), Tata Steel in the company?s annual report.
Moreover, the group is also looking at further integration upstream in raw materials to achieve 100% self-sufficiency in India and around 50% self-sufficiency in Europe over time.
Meanwhile, Tata Steel Global, the Singapore-based holding company for all the overseas steel and mining assets for Tata Steel, has come into effect from August 1. All the future financing for overseas assets will be done through the new holding company.
Tata Steel Global (earlier Tata Steel Asia) will comprise Corus Plc, which Tata acquired last year, NatSteel (the Singapore company acquired by Tata Steel), Tata Steel Thailand and Mineral Holdings, which comprise the mines the Indian steel major has acquired in Ivory Coast and Mozambique.
