Tata Steel commissions Kalinganagar Steel Project

Indian steel major Tata Steel commissioned the first phase (3 million tonnes per annum) of its 6 MTPA capacity Kalinganagar Steel Plant — the largest single-location greenfield steel project in India — in Odisha on Wednesday.

The company plans to expand the plant’s capacity to 16 MTPA by 2025 with the cumulative investment amounting to Rs.1,00,000 crore.

The state-of-the-art plant, which will produce world-class flat and lighter, high-tensile strength steel, was dedicated to the nation by Chief Minister Naveen Patnaik, in the presence of Tata Sons Chairman Cyrus P Mistry and Tata Steel Managing Director T. V. Narendran. With the commissioning of the plant, Tata Steel’s capacity to produce crude steel in India has touched 13 MTPA.

First phase investment

Built at an investment of over Rs.25,000 crore in the first phase, the Kalinganagar plant boasts of India’s largest blast furnace at 4,330 cubic meter with production capacity of 3.2 MTPA, the company said. The plant will witness the seamless movement of raw material with its twin wagon tippler, the first installation in India having unloading capacity of 20 MTPA. The steel plant claims to have the most advanced carbon hearth technology along with on-site power generation of 202 MW through gases discharged by coke oven and blast furnace. “Tata Steel project will be a milestone in the industrial history of Odisha. Kalinganagar has become the industrial capital of the entire eastern India,” Mr. Patnaik said.

“Tata Steel is planning to expand the capacity of Kalinganagar plant to 16 million tonnes per annum by the year 2025 with cumulative investment of about Rs.1,00,000 crore,

The company will also invest Rs.2,300 crore for scaling up of the capacity of its captive Khandabandh iron ore mine,” Chief Minister said.

Addressing a function marking commissioning of the project, Mr. Mistry said, “Odisha, which has emerged as top investment destination in the county, is poised to grow by 20 per cent by 2020.”

“Tata Steel has commissioned its Kalinganagar Steel Plant. The group will soon have 55,000 tonne per annum capacity Ferrochrome plant at Gopalpur. At the same place, Tata’s multi-product special economic zone is expected attract Rs.10,000 crore investment from the country and outside” said Tata Sons Chairman. Among others State Industries Minister Debi Prasad Mishra and Steel and Mines Minister Prafulla Mallick spoke on the occasion. Koushik Chatterjee, Group Executive Director (Finance and Corporate) was present at the commissioning function.

Boeing, Tata Advanced Systems form JV

Aviation major Boeing and the Hyderabad-based Tata Advanced Systems Ltd (TASL) have joined hands to manufacture aerostructures, starting with those for the AH-64 Apache helicopter, in India.

Announcing their joint venture, a release from Dubai on signing of the agreement on Monday, said the partnership was for also collaborating on integrated systems development opportunities in the country.

A manufacturing centre of excellence to produce aerostructures for the Apache helicopter is to be created first. In September, India had signed contracts with Boeing for purchase of 22 Apache and 15 Chinook helicopters, in a deal to be executed over four years and valued about $3 billion.

President and CEO of Boeing Defense, Space & Security, Chris Chadwick said capitalising on India’s industrial capability, innovation and talent, the partnership would help improve Boeing’s long-term competitiveness.

Describing the JV as a ‘clear example’ of Boeing’s long-term commitment to ‘Make in India’, Boeing India President Pratyush Kumar said over the last 12 months “we have doubled our sourcing from India and committed to continue that journey.”

Over time the JV — agreement for which was signed by TASL Chairman S. Ramadorai and Senior Vice-President (global sales and marketing) of Boeing Defense, Space & Security, Tom Bell — would compete for additional manufacturing work packages across Boeing platforms, both commercial and defence.

The agreement, according to Mr. Ramadorai, will propel growth of the Indian aerospace sector by leveraging the world-class competencies of TASL and its supplier eco-system.

It would provide access to India’s world-class manufacturing capability, skilled talent and competitive cost structures.

TASL, its CEO Sukaran Singh, said, is one of the select few in the private sector into manufacturing and assembly of aircraft and helicopters in the country and well-positioned for large-scale systems integration work in the aerospace and defence sectors.

The wholly owned subsidiary of Tata Sons, offering integrated solutions for aerospace, defence and homeland security, is a manufacturing partner for global OEMs, including Boeing, Airbus, Sikorsky, Lockheed Martin Aeronautics, Pilatus Aircraft Ltd, Cobham Mission Equipment and RUAG Aviation.

A few other Tata group companies have established partnerships with Boeing to manufacture aerostructures for Boeing’s commercial and military aircraft.

Google and Amazon in fray to buy Tata's data centre in a deal worth up to Rs 4,589.2 crore

Search engine giant Google Inc and ecommerce behemoth Amazon are among those in talks with the Tata Group to buy the data centre business of Tata Communications in a deal expected to fetch about Rs 4,261.4 crore to Rs 4,589.2 crore ($650-700 million).

They are competing with bulge-bracket private equity funds including the Blackstone Group, Carlyle, KKR, Bain Capital and Advent International, who are all looking to buy up to 74% stake in the data centre unit and take control of the business that is spread across 44 locations in India and abroad. The salt-to-steel conglomerate is likely to retain a minority stake.

The transaction, if successful, will help Tata Communications reduce debt burden and concentrate on its core data carrier business. The company has net debt of Rs 9,178 crore ($1.4 billion), according to a July 2015 investor presentation.

The Tata Communications stock ended 3.1% down at Rs 402.35 on Thursday. Its current market cap is Rs 11,467 crore.

The Tata Group has hired Jefferies LLC to advise on the transaction. "The initial round of bids have already come and we are in the midst of advancing the process," one of the sources said.

Tata Comm declined to comment saying it would not say anything beyond last month's exchange filing. In the exchange filing, the company said it is exploring various strategic options for its data centre infrastructure business. Google, Bain, Advent, KKR, Carlyle and Blackstone declined to comment.

Amazon did not respond to mails seeking comments.

UP IN THE CLOUD

Besides India, Tata Communications has data centres in the US, UK and Singapore, with over 1 million sq ft of co-location space, offering managed hosting and storage services. In India, it has facilities in leading metros such as New Delhi, Mumbai, Bengaluru, Chennai, Kolkata and Pune, besides some tier-II and tier-III locations.

The interest from giants such as Google and Amazon is because of their intention to expand the cloud computing infrastructure business in India, a key market. Third-party data centres have become essential as more and more enterprises opt to outsource IT infrastructure services.

Acquiring large data centre operations will give access for companies like Google to penetrate into the Indian data market. Google already has a partnership with the Tatas. Google Cloud Interconnect is connecting with Tata Comm's IZO Public platform that enables companies to set up cloud computing facilities.

Amazon Web Service, or AWS, is one of the leading data centre operators in the world and the company has aggressive plans in India, said a banker close to Amazon.

GOOD TRACTION FOR DATA CENTRE

Tatas are achieving good traction with both providers of cloud services and ecommerce providers for its data centre, it had said in the presentation.

Non-core asset monetisation will act as a potential catalyst for the Tata Communications stock as it will lead to a reduction in leverage, Morgan Stanley said on July 30, soon after the company's earnings. The data centre business addedRs 436 crore to Tata Communications' FY15 revenues and has about 27% EBITDA (earnings before interest, tax, depreciation & amortisation), the company said in an investor presentation last month after its June quarter earnings.

"Tata Communications is our top pick because of its higher leverage to global data growth as a result of a wide footprint, least exposure to regulatory risks and improving business mix that we expect to drive profits to the highest among our coverage universe," Morgan Stanley added.