The Hindu Business Line : Corus plans investment in flat products in India

THE $12-billion European steel giant Corus will formalise a short and medium term strategy for investment in flat products in India. The 19 million-tonne steelmaker has just come out of the red and is now considering investments for future growth. The decision on investment will be taken in the next 12 months.

Talking to newspersons on the sidelines of Metals 2004, organised by the Bengal Chamber of Commerce and Industry here on Friday, Mr Duncan Pell, Director, Commercial Co-ordination, said that the Indian steel demand growth rates were expected to grow by an average of 6.3 per cent in the next 8 years.

The corresponding growth rate in China was expected to be 5-6 per cent. "In this context we should develop a strategy on India," he said.

Apart from India, the company has already scouted for opportunities in China and is also considering opportunities available in some of the European Union countries.

About the current global steel boom, Mr Pell said: "We believe the boom will continue for at least seven years. However, given the raw material crisis, the cost of production will increase and profitability will be decided on the efficient use of raw material."

On the demand side, however, Corus believes that demand for flat products will increase manifold in India, and unless the production potential increases, there may be a case for import of specialised steel items in the next five years.

"Demand for long products also looks sustainable due to the construction activities required to keep pace with growth. Overall there is a tight balance between demand and supply," he said.

Formed in 1999 through the merger of Hoogovens and British Steel, Corus remained in the red for four years and made a turnaround in the first half of 2004.

The company has decided to divest its aluminium business. Having 48,500 employees, including those with its four integrated steel plants in Europe, the company also markets its products in the US. It also has a four million tonnes of steel trading profile apart from being a producer in its own right.

Mr Pell said 41 per cent of the company's turnover was dependent on strip products, followed by 26 per cent from distribution, 21 per cent from long steel products and 12 per cent from aluminium.