During the financial
year, the Company
achieved the highest
ever consolidated
EBITDA of
Dear Shareholders,
It gives me immense pleasure to write to you at the end of an eventful year for Tata Steel. I hope this letter finds you and your families well and safe.
We began the year amidst the deadliest wave of the pandemic, which took a severe toll on lives and livelihoods, not just in the country but the world over. As the world navigated through the disruptions brought by the pandemic, economic activity continued to experience several instances of volatility and uncertainty.
After a 3.5% contraction in CY 2020, world GDP rebounded at an estimated 5.5% in CY 2021, reaching a new high in the first quarter. The improved economic performance was the result of rapid vaccinations, relaxation in curbs caused by the pandemic, massive fiscal support, robust consumer spending and improved business activity. The Indian economy too, quickly overcame the pandemic’s headwinds. India’s GDP is estimated to have expanded 8.7% in FY 2021-22 against a contraction of 6.6% in FY 2020-21.
As we continued to navigate through the pandemic with resilience, the war in Ukraine has triggered another crisis that has brought before us numerous other challenges in the form of strained geopolitical and trade relations.
Bandra Worli Sea Link, Mumbai (Tata Steel's state-of-the-art durable LRPC strands and Tiscon reinforcement bars were used in the construction)
The ongoing geopolitical conflict, re-imposition of lockdown in China on account of fresh COVID-19 cases, global inflation and continuing supply shortages are expected to adversely impact global GDP growth in 2022. The World Bank expects global growth to decelerate from an estimated 5.5% to 3.2% Commodity and energy prices are expected to remain high in the wake of the conflict and sanctions, thereby resulting in an increase in global inflation.
While there exist risks of high input costs, the growth of the Indian steel industry is likely to remain stable as domestic demand is expected to remain robust and global supply‑demand dynamics may present export opportunities.
FY 2021-22 was a pivotal year for the Company. We demonstrated extraordinary resilience, agility and adaptability, which allowed us to record best-ever EBITDA performance despite continued uncertainties. The Company was able to accelerate business restructuring, innovation and growth.
During the financial year, the Company achieved the highest
ever consolidated EBITDA of
On the back of this performance, I am happy to report that
the Board of Directors have recommended a dividend of
The continued steel cycle upswing saw the Company scaling its business, by way of both organic capital expansion and inorganic acquisitions.
The most significant of these is the proposed acquisition
of Neelachal Ispat Nigam Limited through its subsidiary
Tata Steel Long Products Limited, for a total consideration
of
The continued steel cycle upswing saw the Company scaling its business, by way of both organic capital expansion and inorganic acquisitions.
As part of its business restructuring exercise, the Company
successfully divested its stake in NatSteel Holdings Pte
Limited, Singapore for an equity value of
Meanwhile, the Company continued to accelerate its capex allocation for the 6 MnTPA Pellet Plant, the 2.2 MnTPA Cold Roll Mill Complex along with the 5 MnTPA expansion at Kalinganagar. The 6 MnTPA Pellet plant will be commissioned in Q3 FY23, followed by the Cold Roll Mill Complex and the 5 MnTPA expansion, which will drive cost savings and product mix enrichment.
Benches made of Fibre Reinforced Polymer (FRP) composites
The Company has also made progress in the New Materials Business. Tata Steel has the objective to build its business in knowledge and intellectual property intensive and non‑cyclical new materials. The Company is exploring Composites, Graphene and Advanced Ceramics as areas of growth. During the year, the Company, through its subsidiary, started working towards building a world-class facility to produce medical materials with a focus on healthcare.
In Europe, Tata Steel achieved a complete separation of its UK and Netherlands operations in October 2021. Under the new structure, Tata Steel UK and Tata Steel Netherlands will operate as two independent companies pursuing separate strategic paths.
Tata Steel continues to invest significantly in new technologies for digital transformation, with the objective to render a more agile organisation that better responds to changing market dynamics and to make our businesses more resilient.
The pandemic has acted as a catalyst for accelerating our digital transformation efforts across various spheres of our business to ensure workforce safety, business continuity, sustainability and agile decision-making.
Towards this end, this year, we piloted digitising our factories by creating ‘Digital Twins’, a simulated digital replica of factories through real-time data analytics, thereby opening up possibilities for data-driven ‘Smart Factories’ in the future.
The Company has also taken significant strides to adopt efficient clean energy technologies and circular economy projects which underpin our transition to becoming a climate neutral organisation. The most notable project in this area was the commissioning of the 5 TPD CO2 capture plant at Jamshedpur to extract CO2 directly from blast furnace gas, a first in India by a steel company.
5 MnTPA expansion work underway at Tata Steel Kalinganagar
In acknowledgement of Tata Steel’s efforts and commitment towards principles of sustainability, the World Steel Association has once again recognised Tata Steel and Tata Steel Europe as Sustainability Champions for the fifth consecutive year. Tata Steel was also inducted as a member of worldsteel’s New Sustainability Charter which looks to generate positive impacts on people, planet and the prosperity of society.
Our CSR initiatives and outreach activities continued to reflect our endeavour to operate as a socially conscious and responsible organisation which strives to build resilient and empowered communities.
Towards fulfilling these aspirations, Tata Steel's programs across the thematic areas of Education, Nutrition, Health, Livelihood, Water resource management and Women & Youth empowerment reached 2.87 million lives and our employees contributed to over 51,000 hours of volunteering work.
During the repeated waves of the pandemic, Tata Steel made every possible effort to serve the community by providing sustenance supplies, counselling and livelihood support. Tata Steel supplied over 80,000 tonnes of liquid medical oxygen, provided vaccination at doorstep and distributed masks and Rapid Antigen Testing (RAT) kits to communities where it operates.
The Company introduced the Social Security COVID-19 Family Protection Scheme for the families of all the employees, who lost their lives due to the pandemic to ensure an honourable standard of living for their families.
With the bulk of our population covered by vaccination, the risk of large-scale infections and mortality appears low. However, with ramped up health and medical oxygen infrastructure and institution of comprehensive safety measures, Tata Steel remains prepared to ensure effective and rapid response to any fresh surge.
In conclusion, the Indian economy is expected to remain resilient despite the ongoing geopolitical conflict which is likely to undermine the world GDP growth. India is expected to remain one of the world’s fastest growing large economies. The government’s resolve towards faster infrastructure development through supportive policy reforms is expected to catalyse growth.
Best ever financial performance and a dominant market position provides Tata Steel solid foundations to capitalise on improved infrastructure activity, simplify and transform its business structure, accelerate digital and green innovations and embark on the next level of sustained growth.
I would like to thank Dr. Peter Blauwhoff and Mr. Aman Mehta for their contributions to the Board of the Company. I also welcome Ms. Farida Khambata, Mr. David Crane and Mr. Noel N. Tata on the Board of the Company.
I thank all our employees for their commitment and engagement towards building a strong, agile and responsible organisation. I also express my sincere gratitude to all stakeholders for their continued trust and support and wish that you continue to accompany us in our journey to meet our ambitions for the future.
Warm regards,
N. Chandrasekaran
Chairman
