SUMMER PROJECT

PROGRESS REPORT

MARKET ANALYSIS OF

MANUFACTURING SECTOR

SUBMITTED TO: SUBMITTED

BY:

Gurpreet Kaur Mam Satyam Rajput

Chandigarh University UID: 19BBA1383

Gharuan, Mohali Batch : 2019-2022

Date of commencement : 25/06/2021

Reporting guide : . Gurpreet kaur

Company : Tata Steel ltd

Project assigned : Market analysis of Tata Steel ltd.

Objective : To do market analysis of Tata Steel ltd. And understand it’s market position &
growth possibility in the future .

Introduction to Tata Steel :

Formerly known as Tata Iron and Steel Company Limited (TISCO), Tata Steel is among the top
steel producing companies in the world with an annual crude steel capacity of 34 million tonnes
per annum. It is one of the world's most geographically-diversified steel producers, with
operations and commercial presence across the world. The group (excluding SEA operations)
recorded a consolidated turnover of US$19.7 billion in the financial year ending 31 March 2020.
It is the second largest steel company in India (measured by domestic production) with an
annual capacity of 13 million tonnes after SAIL.

Tata Steel operates in 26 countries with key operations in India, Netherlands and United
Kingdom, and employs around 80,500 people.Its largest plant (10 MTPA capacity) is located in
Jamshedpur, Jharkhand. In 2007, Tata Steel acquired the UK-based steel maker Corus. It was
ranked 486th in the 2014 Fortune Global 500 ranking of the world's biggest corporations.It was
the seventh most valuable Indian brand of 2013 according to Brand Finance.

History of Tata Steel :

Tata Iron and Steel Company (TISCO) was founded by Jamsetji Tata and established by Dorabji
Tata on 26 August 1907. TISCO started pig iron production in 1911 and began producing steel in
1912 as a branch of Jamsetji's Tata Group.The first steel ingot was manufactured on 16
February 1912.

By 1939, it operated the largest steel plant in the British Empire. The company launched a
major modernization and expansion program in 1951. Later, in 1958, the program was
upgraded to 2 million metric tonnes per annum (MTPA) project.By 1970, the company
employed around 40,000 people at Jamshedpur, and a further 20,000 in the neighbouring coal
mines.

Market Size :

Tata Steel Limited, with revenues of US$ 22.67 billion in FY 2019, is a leading global steel
company with an annual steel production capacity of 33 MnTPA.

Established in Jamshedpur (India) in 1907, the Company took shape from the vision of founder
Jamsetji N Tata and is today one of the world's most geographically-diversified steel producers
with operations and commercial presence across the world. Tata Steel group is spread across
five continents with an employee base of over 65,000.

Focusing on Innovation, Technology, Sustainability & People, the Company strives to be the
global steel industry benchmark for value creation and corporate citizenship and become the
most admired brand in metals and minerals space.
Currently, Tata Steel's consolidated India crude steel production capacity stands at 19.6 MnTPA
with manufacturing facilities in Jamshedpur in Jharkhand, Kalinganagar and Dhenkanal in
Odisha, Sahibabad in Uttar Pradesh and Khopoli in Maharashtra. Recently, Tata Steel has
commenced the phase 2 expansion of its Kalinganagar steel plant to 8 MnTPA.In addition, the
Company has several downstream product extensions with manufacturing facilities for Wires,
Tubes, Bearings, Agriculture Equipment and Industrial By-products. It also has a Ferro-alloys
and Minerals division and a heavy-duty engineering and fabrication unit, Tata Growth Shop.

Tata Steel successfully delivered 16.26 MnTPA of steel to the Indian market in FY 2019,
recording an increase of 34% over the previous year due to the acquisition of Bhushan Steel
(now renamed as TSBSL) and a ramp up at both Kalinganagar and Tata Steel BSL.

In India, Tata Steel operates an end-to-end value chain

that extends from mining to

finished steel goods, catering to an array of market

segments such as automotive, construction, general
engineering etc.
The Company possesses and operates captive mines that ensure cost-competitiveness and
production efficiencies through an uninterrupted supply of raw material. Tata Steel’s iron ore
mines in Jharkhand and Odisha enable 100% captive iron ore usage and the coal mines in West
Bokaro & Jharia ensure ~30% captive coal usage in operations. Tata Steel additionally has a
dolomite mine, a chromite mine and manganese mines that ensures steady and cost-efficient
supply of raw materials to its ferro alloy plants. A robust presence across the value chain helps
the Company achieve higher economic efficiencies and customer satisfaction standards which is
one of the best in the industry.

In Europe, Tata Steel is amongst the largest steel producers with a crude steel production
capacity of over 12.3 MnTPA. It established its presence in the European continent after
acquiring Corus in 2007. With steelmaking facilities in the UK and Netherlands and downstream
plants across Europe, it supplies high quality strip steel products to demanding markets such as
automotive, construction, packaging and engineering.

In South-East Asia, Tata Steel operations began in 2004 with the acquisition of NatSteel,
Singapore. In 2005, it acquired a majority stake in Thailand-based steelmaker Millennium Steel,
which further strengthened its South-East Asian operations.

Growing maket share :

As on 31 March 2018, Tata Group held 31.64% shares in Tata Steel. Over 1 million individual
shareholders hold approx. 21% of its shares. Life Insurance Corporation of India is the largest non-
promoter shareholder in the company with 14.88% shareholding.

Shareholders Shareholding

Promoters: Tata Group companies 31.64%

Insurance Companies 21.81%

Individual shareholders 22.03%

Foreign Institutional Investors 15.35%

GDRs 02.41%
Others 07.05%

Total 100.0%

Industy growth :

Tata Steel is headquartered in Mumbai, Maharashtra, India and has its marketing headquarters
at the Tata Centre in Kolkata, West Bengal. It has a presence in around 50 countries with
manufacturing operations in 26 countries including: India, Malaysia, Vietnam, Thailand, UAE,
Ivory Coast, Mozambique, South Africa, Australia, United Kingdom, The Netherlands, France
and Canada.

Tata Steel primarily serves customers in the automotive, construction, consumer goods,
engineering, packaging, lifting and excavating, energy and power, aerospace, shipbuilding, rail
and defence and security sectors.

Expansion plans --
Tata Steel has set a target of achieving an annual production capacity of 100 million tons by
2015; it is planning for capacity expansion to be balanced roughly 50:50 between greenfield
developments and acquisitions.] Overseas acquisitions have already added an additional 21.4
million tonnes of capacity, including Corus (18.2 million tonnes), NatSteel (2 million tonnes) and
Millennium Steel (1.2 million tonnes). Tata plans to add another 29 million tonnes of capacity
through acquisitions.

Major greenfield steel plant expansion projects planned by Tata Steel include:

1. A 6 million tonne per annum capacity plant in Kalinganagar, Odisha, India.

2. An expansion of the capacity of its plant in Jharkhand, India from 6.8 to 10 million tonnes per
annum.

3. A 5 million tonne per annum capacity plant in Chhattisgarh, India (Tata Steel signed a
memorandum of understanding with the Chhattisgarh government in 2005; the plant is facing
strong protest from tribal people)

4. A 3 million tonne per annum capacity plant in Iran.

5. A 2.4 million tonne per annum capacity plant in Bangladesh.

6. A 10.5 million tonne per annum capacity plant in Vietnam (feasibility studies are underway)

7. A 6 million tonne per annum capacity plant in Haveri, Karnataka.

Swot analysis :

Strengths:

Position: Tata Steel is one of the largest steel manufacturers in the world and world’s second
most geographically diversified steel producer. It has the strong presence in Asia-pacific and
Europe.

Diversified Product Portfolio: Tata Steel has a wide range of products ranging from flat steel
products, agricultural implements, construction products and much more. A diversified product
portfolio ensures revenue flow from different markets around the world.
Trust of TATA: Tata is one of the most trusted and respected brands not only in India but all
over the world. The association of the name provides immense brand equity to the company.

Integrated operations in India: The whole process of extraction from mines and ores to
producing finished steel material is integrated in India. The integrated operations save a lot of
time and cost and also maintain the required quality.

Global footprint: Tata Steel has the presence in over 50 countries with operations in over 26
countries which increase its market penetration and share.

Weakness:

Mistry fiasco has hurt the image: The fallout between Ratan Tata and Cyrus Mistry has had an
adverse impact on the image of the Tata group which also translates to Tata Steel.

Over dependence on Europe: Over 50 percent of Tata Steel’s business comes from Europe and
thus any economic slowdown in the Europe affects Tata Steel’s revenues.

Disintegrated operations in Europe: Although Tata Steel’s operations in India are integrated; its
operations in Europe are disintegrated and hence are dependent on various other suppliers.
This affects control on quality an increased costs.

Opportunity:

Increasing demand for steel in India: The steel market in India is expected to grow in the next 4
years due to the growth in the construction industry and manufacturing facilities in India. This
will certainly benefit Tata Steel.

Adapt newer technologies: Tata Steel lags behind its competitors in the technology front and
has an opportunity to adopt newer technologies such as the Cortex process, Hismelt process
etc.
Growing manufacturing, construction and automotive industry around the world: Growth in
manufacturing, construction and automotive industry in the future will drive the growth in the
steel industry and Tata Steel is set to benefit from it.

Threats:

Intense competition: Tata Steel faces stiff competition from industry giants such as JSW Steel,
Essar Steel, and ArcelorMittal etc. This reduces its market share around the world.

Government and Environmental regulations: Tata Steel is subjected to stringent governmental

and environmental regulations in mining as well as production. This increases compliance costs
for the company.

Decreasing global steel prices: Excess steel production in China meant that it supplied steel
cheaper to the world which forced the process to lower down throughout the world.

LEARNING OUTCOME :

Got to know about steel industry .

Got to know about Tata steel ltd. Market share .

Got to know about challenges faced by Tata stee ltd.