Tata Steel mulls selling unprofitable Corus assets | business | Hindustan Times
Today in New Delhi, India
Dec 06, 2016-Tuesday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Tata Steel mulls selling unprofitable Corus assets

business Updated: Aug 10, 2008 23:02 IST

PTI
Highlight Story

Aiming to almost double the return on invested capital (RoIC) in five years, Tata Steel group might dispose off some low-profiteering assets of Corus, the Anglo-Dutch steel maker which it had acquired for $12.9 billion last year.

“The group will pursue the optimisation of its European assets, dispose and restructure assets that are of low profitability and pursue differentiation of products and services,” said Jean-Sebastien Jacques, director (strategy), Tata Steel group, in the company's latest annual report.

The Tata Steel has set itself an ambitious target to improve the return on invested capital of its existing assets to 30 per cent from the current 19 per cent over the next five years, he said.This will, however, be a daunting task for the group mainly because the large portion of its raw material resources comes from long-term contracts.

Tata Steel, which has a combined 28 million tonne per annum steel making capacity and now ranks the sixth largest in the world, has been on the receiving end as Corus depends on long-term contracts for raw material supply, the price of which has skyrocketed in recent times.

Tata Steel India has self-sufficiency in iron ore and 60 per cent for coking coal. With the acquisition of Corus the combined security of the group now stands at 22 per cent, down from 80 per cent for Tata Seel alone. Tata Steel Group is looking for mines abroad mainly to feed Corus and targets to 100 per cent self-sufficiency for India and 50 per cent for its European operations.