‘We need to rekindle the spirit of growth’

Tata Steel Group is among the top-ten global steel companies being the world’s second-most geographically-diversified steel producer, with operations in 26 countries and a commercial presence in over 50 countries.

Ashish Anupam, Executive-in-Charge, Tubes SBU, Tata Steel told Sandeep Menezes that the Tubes and Pipes industry is hopeful that the new government augurs well for them and expedites reforms and key projects mandate enabling faster execution of pending projects.

Ashish Anupam

Ashish Anupam


Excerpts from the interview:

Last year was tough with order books being low and prices under pressure across the pipe/ tube manufacturing industry. Going forward, how do you foresee the industry growth scenario?

Though last year the Tubes and Pipes industry barely registered any growth we at Tata Steel- Tubes SBU (separate business unit) registered a growth of 8 per cent over last fiscal. This growth was primarily due to our strong brands of ‘Tata Structura’ and ‘Tata Pipes’ besides our robust all India distribution network.
However the industry scenario is looking optimistic across sectors and there is an expectation of growth in investments especially in the infrastructure sector. The construction and the automotive industry in specific have already started showing improvements in demand and we hope for further improvements in the coming quarters.
The Tubes and Pipes industry is hopeful that the new government augurs well for them and expedites the reforms and key projects mandate enabling faster execution of pending projects.

Tell us about the main project drivers for Indian tubes/ pipe manufacturing industry?

The main drivers for growth in the tubes/ pipes industry stems from investments in and growth of the following sectors:
a) Construction Sector: The demand in the construction sector is chiefly driven by the Infrastructure projects, Industrial demand coupled with Commercial and Residential projects. These sectors play a pivotal role in the growth of structural tubes in the country.
b) Automobile Sector: This sector directly impacts the demand for precision tubes which is used in various applications in the auto sector.
c) Energy and Power Sector: This sector essentially creates demand for Oil and Gas pipelines (large dia pipes) and boiler tubes for the power sector.

There has been slight revival in Western economies but at the same time increased opposition towards pipe imports from India?

The export figures of pipes from India have not been significant enough to create any major change in the market place and hence we do not foresee any opposition to the export of pipes from the country.

Revival of western economies commodity prices, which will in turn hurt secondary manufacturers? The Indian Rupee has slight stabilized after months of continuous slide. How has this impacted the pipes/ tubes manufacturing industry?

Tubes and Pipes are not commonly traded items in the International Market (except for specialized products for niche application) and thus any changes in the exchange rate or in western economies do not have a significant impact in the Indian tubes/ pipes market.

Being a fully integrated steel player, does Tata Steel enjoy costs advantages vis-à-vis rivals in the pipes and tubes segment?

The tubes business in Tata Steel is an independent profit centre and a separate business unit. The Tubes SBU buys all its HR/CR coils from the Steel Division at the prevailing market price and therefore there is no cost advantage to the Tubes SBU as compared to any of our other competitors. We however get an advantage of assured supply of our HR/CR coils for all our requirements through our own source which also ensures consistency in product quality giving us a competitive advantage.

What is Tata Steel’s future business strategy in the Pipes and Tubes segment?

We need to rekindle the spirit of growth. Currently we are at a rate of 500,000 tpa and we would like to add 100,000 t every year in the next 4 to 5 years which will enable us to reach 1 million tonne of production. This is aligned to the expansion of our Steel Division at the Jamshedpur and Kalinganagar plants.
We are also focusing on the following:
– Leverage our key products/ retail presence and reach out to rural markets and upcoming SME customers
– Make service and solutions as key differentiators for our products offerings in the market

Three years ago, Tata Steel planned a new tubes unit in Kalinganagar and another unit for Oil and Gas applications- but then the market witnessed demand drop. Comment.

Though we remain keen in adding to our capacities, the location is still under discussion. We are also reviewing our plan for the Oil and Gas application with a fresh approach.

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