Tata Steel is banking on its flat-product division that supplies steel to consumer- driven sectors such as automobiles, consumer durables and railways, to sustain momentum in its Indian operations.
The company is expanding its flat-product capacity to almost 6 million tonnes per annum from the current 4 million tonnes, thereby giving it an over 60% share in the firm's overall capacity by 2013-14.
Traditionally, flat products carry better margins against long products used mostly in real estate and infrastructure sectors.
"Most integrated steel producers in the world focus largely on flat products," said TV Narendran, vice-president, Tata Steel.
"It would be for us as well. We are investing only in the expansion of our flat-product business. This year we will sell 1 million tonne more flat steel and then a million more next year."
The company has a lion's share of 40-45% in the automobile segment and is currently branching out to other segments to create fresh demand.
"The biggest segment that has been ignored by primary steel makers is the small and medium enterprises. That is where our core focus is going to be in the near future," said Narendran.
{{/usCountry}}"The biggest segment that has been ignored by primary steel makers is the small and medium enterprises. That is where our core focus is going to be in the near future," said Narendran.
{{/usCountry}}Unlike group company Tata Motors' fortunes with Jaguar Land Rover, Tata Steel's Corus acquisition of 2007 is weighing its profitability down.
Sluggish demand in Europe saw its profits slide by almost 89% in the April-June quarter this year even as sales in its Indian operations grew by 13.3%.