Tata Steel Looking at Increasing Tyre Wire Production

India’s largest steel producer, Tata Steel, is looking at making new acquisitions throughout Asia in order to expand capacity and establish a stronger foothold as a tyre industry supplier. According to the Indian business newspaper Mint, Tata Steel’s managing director B. Muthuraman has disclosed the company is looking to purchase both finished steel product companies and iron ore or coal mines in order to boost its annual 30 million tonne steel manufacturing capacity by more than 50 per cent within a decade.

“We are looking for acquisitions in the steel wires business in Indonesia and Southeast Asia. Apart from expansion in capacity, we also want to move into high grade, higher-value add wires used in tyre cords and oil tempered wires through acquisitions,” said Muthuraman. While the company is currently the world’s sixth largest steel wire manufacturer, producing half a million tonnes per annum, at present their principal tyre industry product is bead wire.

With the radialisation of heavy and medium commercial vehicle tyres tipped by the Indian publication Dalal Street Investment Journal to increase by 500 per cent within five years and the rate for light commercial vehicles predicted to double within the same period, the demand for higher grade steel wire is strong in India, and this demand has not been hampered by rising steel prices.

It is these strong market prices that have enabled Tata Steel to bankroll their recent and planned acquisitions. An analyst for Macquarie Securities (India) recently commented that “the business environment for the company is looking bullish and we expect the company to do well,” and in recognition of the role Tata Steel has played in putting India on the world map in terms of steel production, Mr. Muthuraman was conferred the Bombay Management Association’s “Management Man of the Year Award” on June 4.