Tata Steel eyes growth over next three years
Thailand's annual steel consumption is projected to grow steeply from 17.3 million tonnes last year to over 20 million tonnes in the next three years, driven mainly by the government's infrastructure projects.
Tata Steel (Thailand) expects its sales to increase by 12 per cent to 1.25 million tonnes for fiscal year 2016 and to 1.7 million tonnes within the next three years when its three steel plants in Thailand will reach their full capacities.
The company’s fiscal year runs from April to March.
Rajiv Mangal, president and CEO of Tata Steel (Thailand), said the growth of steel consumption in Thailand would be in line with the country’s GDP growth.
“Thailand’s GDP growth is expected to be about 3 per cent this year, and that will help improve steel consumption to grow by between 4 per cent and 5 per cent,” he said.
Mangal said the government has launched many infrastructure projects, including the double-track railway, the Thailand-China mini high-speed train, motorways, new MRT routes, and four-lane roads to connect with neighbouring countries. These projects will add about 2.3 million tonnes (or Bt50 billion in value) to the country’s overall steel consumption within the next five years.
Tata Steel has three plants in Thailand – in Saraburi, Rayong and Chon Buri.
Mangal said that according to the World Steel Association, global steel consumption had increased only slightly last year, by 0.6 per cent, compared to 2013.
It was also the first time since 1995 that China had witnessed internal steel consumption slow down by 3.3 per cent to 710.8 million tonnes last year due to the decline in the housing and construction sectors. Steel consumption in the Asean region, however, surged by 4.2 per cent last year.
He said that for Thailand, the steel consumption in 2014 declined by about 3.5 per cent to 17.3 million tonnes. The country’s industry sentiment index was less than 100 for the last many months, reflecting the unsure situation for investors.
“We expect to increase our steel sales by 12 per cent to about 1.25 million tonnes in the new fiscal year, driven by various encouraging factors,” said Mangal, noting that those factors are: the hiring of local sales people in Cambodia; the first steel order from Xayaburi Phase 2 for 30,000 tonnes to be delivered in August this year; additional volume of steel exports to India; and expansion into new export markets. The company expects to export about 50,000 tonnes of steel to India this year.
Tap new export markets
He said the company currently exported steel to many markets in Southeast Asia like Laos, Cambodia and Indonesia, as well as to Pakistan and India.
The company will tap new export markets, particularly Australia and New Zealand.
“We plan to increase our export contribution from 7 per cent in fiscal 2015, ending March this year, to about 12 per cent for the new fiscal year,” said Mangal.
He added that the company also expected to increase sales of high-value steel products, such as SD50 rebar (reinforcing steel), cut & bend steel, and super ductile rebar, to increase by about 10 per cent in the new fiscal year. Such high-value |products will account for 30 per cent of the company’s total sales, up from between 20 per cent and 25 per cent in the last fiscal year.
