Tata Steel plans Rs 16,000 cr consolidated capex in FY24

New Delhi: Industry giant Tata Steel is planning a consolidated capital expenditure (capex) of Rs 16,000 crore for its domestic and global operations during the current financial year, according to its top management.

Of the planned amount, Tata Steel has earmarked Rs 10,000 crore towards standalone operations and Rs 2,000 crore for its subsidiaries in India, the company's CEO & MD T V Narendran and Executive Director & CFO Koushik Chatterjee said.

"The projected capital expenditure (capex) for FY2023-24 is set at Rs 16,000 crore on a consolidated basis which is intended to be financed through internal accruals over the full year," the executives said in the company's annual report for 2022-23.

Of this, Rs 10,000 crore has been earmarked towards Tata Steel Standalone operations of which the Kalinganagar project will account for approximately 70 per cent, they said.

The company is in process of expanding capacity of its plant at Kalinganagar, in Odisha to 8 MT from 3 MT.

"Our other Indian subsidiaries, currently in an expansion phase with value accretive projects, especially in downstream operations which are important to service customer needs and improve our value-added product mix, will have a capex of about Rs 2,000 crore," the company officials said.

In Europe, Tata Steel Nederland will incur capex of Rs 1,100 crore on the relining of its blast furnace, which is underway. The remainder of the capex is largely allocated towards and will be spent on sustenance, environmental initiatives, and improvement projects, the leaders said.

Tata Steel has planned capital expenditure (capex) of Rs 12,000 crore on its India and Europe operations during the 2022-23 financial year. While Rs 8,500 crore is for India and Rs 3,500 crore for operations in Europe, Narendran had told PTI in July 2022.

In the UK, Tata Steel has had active and detailed discussions with the UK government in relation to the future of its business there.

Given the UK's decarbonisation journey and rising carbon costs, it has been clear that for the continuity of steel making in the long-term, it is necessary for Port Talbot to transition to alternative green technologies.

The discussions are ongoing and at the same time, some of the existing heavy-end assets in Tata Steel UK will reach the end of life over the following few years.

The management of Tata Steel UK will evaluate all scenarios with regard to the future configuration of the business and will consult appropriately with various stakeholders prior to relevant strategic decisions being taken.

"Any decision making will also take into account our market, customers, supply chain impacts and safe operating practices for our employees," the officials said.