Mr. B Muthuraman

The impact on greenfield projects

Tata Steel has the ability to complete all its greenfield projects. In fact we would like to hasten the project, if we get a little help from the state governments and the Centre.

On the acquisition price being “expensive”

It is unfortunate that the stock markets are not happy and have taken a short-term rather than a long-term view. If Tata Steel were to create an 18 million greenfield capacity in as many countries, with the same product mix, as well as access to European and US markets and build the same brands, it would cost the Company much more than the Rs 53,000 crores it has paid for Corus. Today, it costs US $ 1200 to create a tonne of greenfield capacity. Therefore, 20 million tonnes would cost Rs 90,000 crores. Tata Steel has exercised financial prudence for 100 years.

We are a Company which is very careful with finances and financial structures. So we would never pay more than required. The financing will be structured to take care of the interest of the employees, shareholders and all other stakeholders.

Using the Chairman’s analogy, if you wanted to buy a house two years ago at what you considered a fair price at that time, it may not be the same today. The same has happened in the steel industry as the business cycle has been better. The transcation price is, therefore, higher than when we started.

On plans to achieve the goal of 100 MT by 2015

The Company’s growth plans have to include a combination of greenfield and brownfield expansions in a balanced way. It may be 50:50, but it is difficult to say now. 100 MT by 2015 is a target we must keep moving towards. Tata Steel clearly wants to be the best company in the world. Size is not what we are after in the world of steel, Tata Steel is very well known, more than others who are bigger, because it is a world-class company, known for its efficiency, profitability and its human face.

On Right Sizing

Less people do not necessarily mean lower costs.

We have assured the Unions in Netherlands and the UK that, job cuts are not on top of mind. We wanted markets and customers. We want to explore more opportunities to make value and create synergies. Corus is a strong player in Europe and USA, where it is in the Galvanised and Cold Rolling business. Tata Steel have been thinking of entering UK and this deal gives the Company immediate access. The integration will happen through a common vision and common purpose, but the Corus will be a separate legal equity.

On placing Indian managers and workers in Corus

Corus has good people and we would like to keep the managements and workers the same. There is no need to send people from India.

On future investments in Corus

Both the Netherlands and UK have plans for investment. UK has planned investments for process improvements. The investment in the Netherlands is partially to enhance capacity. We have assured Corus that “investments as planned will continue.” Over the next 4-5 years, about US$ 300 million a year will be invested, which is the normal rate of investment for keeping a steel plant in good health.