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Tata Steel has completely hedged its liability on the British Steel Pension Scheme by securing full insurance cover on future liabilities.
Natarajan Chandrasekaran, Chairman, Tata Steel, in his address to shareholders on Wednesday, said concerning the GBP 6 billion British Steel Pension Scheme, the company has secured full insurance cover for the pension liabilities to ensure that the insurer guarantees the cashflows for future pension payouts.
This has been done at no cash cost to the company and eliminated any future risks from asset-liability mismatches, he said.
The global economic outlook for this year appears to have downside risk, and the global GDP is expected to grow at 2.9 per cent even while the outlook for the Indian economy remains positive with 6.1 per cent expected GDP growth in 2023-34, said Chandrasekaran.
India will remain a major consumer in the global steel industry due to infrastructure development, rapid urbanisation, and supportive policy reforms.
“We expect the steel demand growth to keep pace with the GDP growth over the next decade,” he said.
Future plans
Tata Steel is focussed on achieving a lean group structure for a simpler governance structure and reap the benefit of synergies. The Board has approved the amalgamation of seven subsidiaries and one associate company with Tata Steel. This is at different stages of regulatory approval.
On the growth front, the company has set a target to achieve a production capacity of 40 million tonnes per annum in India by 2030.
“We endeavour to attain leadership position in the long products segment with acquisition of Neelachal Ispat Nigam and it is being ramped up to its rated capacity. Further, NINL being part of the Kalinganagar eco-system is well positioned to grow synergistically in the future,” he said.
Tata Steel plant of 0.75 mtpa through electric arc furnace using scrap in Punjab will go on stream in two years.
Tata Steel Nederland and Tata Steel UK will continue to focus on expanding steel deliveries, improving yield performance, optimising the commercial mix and reducing operating costs, he said.
The company will be financially prudent while executing its growth strategy to generate sustainable free cash flows and create long-term stakeholder value, said Chandrasekaran.
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