100th Annual Report 2006-2007 - Tata Steel

Steelium (India’s first branded cold rolled steel), Tata Shaktee
(galvanised corrugated sheets), Tata Tiscon (re-rolled bars),
Tata Pipes, Tata Bearings, Tata Wiron (galvanised wire products),
Tata Agrico (hand tools and implements) and most recently
Tata Structura (steel hollow sections). Due to consistent efforts
in the last few years, the Company’s turnover from branded
products increased from Rs. 1,300 crores in FY 2002-03 to
Rs. 4,604 crores in FY 2006-07. The Company sold around 1
million tonnes of branded products and crossed the USD 1
billion mark in terms of branded products turnover in the last
financial year. Currently, around 25% of the revenue of the
Company comes from the sale of branded products in India.
In order to enter into new market segments, the Company
entered into a 50:50 Joint Venture agreement with BlueScope
Steel for Coated Steel and Building Solutions business in India
and other SAARC countries. The JV Company has already set
up building solutions facilities in its Pune, Bhiwadi and Chennai
plants. The coated steel plant will be in Jamshepur and currently
site development work is in progress. This project is likely to be
commissioned in 2009.
6. Control Over Logistics
With the proposed expansion of steel capacity in Jamshedpur,
Orissa and other green-field projects in India and overseas as
well as manufacturing footprints in various countries across
the world, the Company’s import / export cargo will increase
significantly. To meet the increased requirement and reduce the
total logistics cost of sea bound cargo, the Company signed a
Joint Venture agreement with Larsen and Toubro Limited to
develop a deep-sea water port in Orissa which will handle cape
size vessels. This project will be commissioned by early 2010 at
an estimated cost of Rs. 2,450 crores.
On 5th December, 2006, Tata Steel and Nippon Yusen Kabushiki
Kaisha (NYK Line) entered into a 50:50 Joint Venture agreement
for setting up a shipping company to cater to dry bulk and
break bulk cargo requirements. The Joint Venture shipping
company - Tata NYK Shipping Pte. Ltd., has been incorporated
in Singapore.
E) Acquisition of Corus and its Financing
a) Corus Acquisition Process
On 20th October 2006, the Boards of Tata Steel, Tata Steel UK
(100% subsidiary of Tata Steel) and Corus reached an agreement
on the terms of a recommended acquisition of the entire issued
and to be issued share capital of Corus, at a price of 455p in
cash for each Corus share. This was to be implemented by
means of a Scheme of Arrangement under Section 425 of the
UK Companies Act, 1985, and the relevant scheme document
was sent to the Corus shareholders on 10th November, 2006.
Subsequently, a competitive situation emerged when a
Brazilian steel company - Companhia Siderurgica Nacional
(CSN) subsequently approached Corus with a proposal to
make a cash offer. While Tata Steel revised its offer to 500p per
share, CSN made a binding offer at 515p per share in December
2006. The Board of Corus recommended CNS’s offer to the
shareholders.
The Corus acquisition was
completed on 2nd April, 2007.
97