The Hindu Business Line : Corus acquisition

The acquisition of Corus Steel by Tatas by investing close to $12 billions may, no doubt, be a proud moment in the history of Corporate India but, as pointed out by several analyses, only time will tell how much the move will benefit the Tatas.

Perhaps, it will facilitate Corus to outsource semi-finished steel at a cheaper price from India for carrying out further value addition in the UK to gain higher margins.

If the Tatas are to reap the benefit fully, primary ore processing, iron-making and quality steel production capacities within India need to be enhanced at a faster pace to meet the high capacity requirements of Corus. This needs further investments, either at the Jamshedpur Works or in the proposed facilities in Jharkhand.

In addition, the logistics of Tata Steel within India, particularly the rail and port-handling facilities need be augmented rapidly.

The move will not only help the two companies, but also exports by the industry. To facilitate this, the Government may consider augmenting railway networks in the areas of Jharkhand, West Bengal and Orissa and improve their connectivity with the port cities of Calcutta and Paradeep, preferably on a BoT basis.

K. Venkataraman

Chennai

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