100th Annual Report 2006-2007 - Tata Steel

Centenary Year
The founder, Jamsetji Tata, had a vision to make India self-reliant.
While he wanted the industry to thrive and prosper, he also
believed in the philosophy of sharing the wealth so generated
for the benefit of the society at large. During the past century,
the Company has always endeavoured to live up to the ideals
of its founder. The Directors wish to express their sincere
gratitude to all the stakeholders, i.e. shareholders, customers,
employees and partners of the Company, for their support and
unstinted loyalty in making this long journey a successful and
rewarding one.
Steel Industry
The year 2007 is one of the most important milestone in the
history of the Company, for three main reasons. It has ushered in
the centenary year of the Company when it enters hundred years
of existence in the month of August 2007. The year 2006-07 has
also seen the highest turnover and profits, continuing the trend of
the past four years. Last but not the least, Tata Steel enhanced its
presence on the international steel scene with the acquisition of
the U.K. based company, Corus Group plc.
Economic conditions during the year continued to be buoyant
around the world. Even Japan, which was mired in a stagflationary
situation for several years, participated in the global growth
momentum. Asia continued to be the prime mover of growth,
with China once again dominating the world economic scene.
India was not far behind. With the Indian economy growing at
9.4% in the year under review, it is expected that the current year
as well will see India’s GDP growing at around 9%.
Growth in steel consumption has accelerated in recent years.
During the last five years, the world steel consumption has
increased by approximately 338 million tonnes from 775 million
tonnes in 2001 to 1,113 million tonnes in 2006. This represents
an average compounded annual growth rate of around 7.5%, as
compared to a modest 1% yearly growth in the previous three
decades upto 2000. World steel production has also kept pace
with an increase of 8.9% during 2006 over the previous year.
Domestic steel production and apparent consumption were higher
by 11.1% and 11.7% respectively over the previous year. It is widely
believed that the Indian economy could sustain an annual growth
rate of 8-9% in the long term. This could translate into a 10% rise in
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