Land registration starts for Tata

Steel's Gopalpur SEZ

Company is developing 55,000 tonne per annum ferro chrome plant at an estimated cost of
Rs 541 crore

Tata Steel's multi-product Special Economic Zone (SEZ) at Gopalpur moved a major step
ahead with the registration process for land commencing in the name of the steel firm today
at the sub-registrar's office at Chhatrapur in Ganjam district.
In the first phase, 1235 acres of land was registered in the name of Tata Steel.
"With the registration of land in favour of the company, we hope to get the SEZ notification
for Gopalpur from the Government of India in November. By early December, we would
launch Gopalpur as an investment destination. We have already talked to investors in China
and South East Asia who have shown interest to invest in the Gopalpur SEZ," Arun Misra,
vice president, Gopalpur project and managing director, Tata Steel SEZ Ltd.
The Gopalpur industrial park being developed by Tata Steel, will facilitate industrial
development of the region to a great extent. Besides generating substantial employment
opportunities, the park is also expected to contribute to the all-round socio-economic
development of the area.
As an anchor tenant, Tata Steel is developing 55,000 tonne per annum ferro chrome plant
at an estimated cost of Rs 541 crore.
The Gopalpur SEZ has the potential to attract investments of the order of Rs 15,000 crore.
Investments are expected to flow in areas like defence, electronics, LEDs (light emitting
diodes) and solar cells.
Tata Steel has roped in Ernst & Young as the consultant for the project while Singaporebased Jurong has been engaged for designing the master plan.

Tata Steel to gradually raise

Kalinganagar output
Analysts say 0.5 mn tonne will get absorbed this year; pricing strategy important

Tata Steel, which will commission a 3 million tonne steel plant in Kalinganagar by
December, plans to scale up its operations gradually.
Analysts said the companys strategy of feeding the local market in phases was the only
viable strategy till demand revived.
Tata Steel will start selling half a million tonnes of hot-rolled steel from the Kalinganagar
plant in 2015-16 and add another million tonnes in 2016-17. The balance will come in
subsequent years. Apart from the Kalinganagar unit, Tata Steel has 9.7 million tonnes
capacity at Jamshedpur.
Half a million tonnes additional production (this year) is not difficult for the market to
absorb, said Pritesh Jani, analyst with Religare Securities. There is also a safeguard duty
levied on this product, so local manufacturers should be able to sell their produce as
imports decline, he added.
The government has in the last few months taken several steps to protect the local steel
industry from rising imports. Apart from import duties levied twice since April, the
government has imposed a provisional 20 per cent safeguard duty on imports of hot-rolled
coils for a period of 200 days.
According to the Joint Plant Committee, India's steel production in April-July 2015 was
31.15 million tonnes against demand for 26.34 million tonnes, highlighting the glut. Among
integrated steel producers, Steel Authority of Indias production during the period was up a
meagre 0.5 per cent year on year, while Tata Steels production grew by about 2 per cent.
Being a brand, the Tatas may not find it difficult to sell the Kalinganagar steel but its price
will be crucial as there is little demand, said Kiran Mehta, director of the Bombay Iron
Merchants Association. Tata Steel tended to sell at a slightly higher rate than others, he
added.
There is going to be stiff competition for Tata Steel, and the company will need to find a
market for itself, said Abhisar Jain, senior analyst with Centrum Brokerage.
The market is not growing at the pace it should, and so Tata Steel is basically going to grab
somebody elses share, said a Mumbai-based steel trader who is also a member of the
Bombay Iron Merchants Association.

Some brokerages are hopeful of a demand revival from the construction and automobile
industries after the central bank lowered the repo rate by half a percentage point last month.
Tata Steel did not respond to an emailed query regarding its plans for sale of Kalinganagar
steel.
Tata Steel has a captive iron ore mine in Noamundi in Jharkhand and in Joda and Kalamati
in Odisha.
The positive factor for the plant is that the iron ore source is captive, and so the company
will be able to make money as input costs will be low, said Giriraj Daga, senior analyst with
SKS Capital & Research.
Tata Steel has commenced coke production at Kalinganagar. The coke oven is a key
component of a steel mill and coke produced there is charged with iron ore in the blast
furnace to produce hot metal.
Since the imposition of the safeguard duty, steel producers have gained some pricing power
as most of them have cancelled prior discounts and have also raised prices of flat products
by Rs 500-1,000 per tonne.

Tata Steel UK's deficit in pension

scheme stands at $138 mn
LONDON: Tata Steel today said that its UK arm has concluded the actuarial valuation of British
Steel Pension Scheme (BSPS) and the deficit in the scheme stands at about GBP 90 million
(around $138 million) as of March 2014.
The residual deficit of Tata Steel UK Ltd (TSUK), an indirect subsidiary of Tata Steel, stood at
around GBP 550 million (over $842 million) for the period ended March 31, 2011.
Trustee of BSPS and TSUK have concluded the triennial actuarial valuation of the scheme as of
March 31, 2014, it said in a regulatory filing.
"As a result of measures agreed between the Trustee and TSUK and benefit changes
implemented following consultation between TSUK, its employees and their representatives, the
on-going residual deficit has been reduced from around 550 million pound as on March 31,
2011 to 90 million pound as on March 31, 2014," it added.
Reacting to the news, Tata Steel scrips today rose 4.25 per cent to settle at Rs 236.80 per
share at the BSE.

Accounting impacts arising from the changes to the pension plan will be recorded in the
company's accounts in due course, the filing said.
BSPS is the largest defined benefit scheme within Tata Steel Europe's portfolio. On account of
low interest rates in the UK, the valuation placed on the scheme's liabilities increased
significantly since the last actuarial valuation in 2011 leading to a greatly increased funding
deficit.
Tata Steel negotiated with the employees and unions on making certain changes to the pension
scheme, which the firm claimed will make it affordable and sustainable and at he same time will
provide competitive benefits to the workers.
In June this year, unions -- Community, Unite, Ucatt and GMB -- had threatened to initiate
industrial action at Tata Steel, the first such action in the UK's history in over three decades.
However, the unions suspended their strike after the Indian steel giant agreed to retain a
modified final salary pension scheme.
Tata Steel had argued that reforms to the BSPS, which has around 135,000 members and a
deficit of more than 2 billion pound, are vital if the company is to return to profitability.

Tata Steel to pay Rs 154.72

crore as annual bonus
Private steel major Tata Steel will pay Rs 154.72 crore to its eligible employees as annual
bonus for 2014-15.
A Memorandum of Settlement was signed here between Tata Steel and the Tata Workers
Union.
Under the agreement, the total payout for 29,413 eligible employees of all applicable
divisions/units of the company on account of annual bonus for 2014-2015 will be Rs 154.72
crore, Tata Steel said in a statement.
Since majority of our employees of the steel company are drawing salary/wages higher than
the limit laid down in the Payment of Bonus Act, 1965, they are not eligible for bonus under
the Act, it added.

However, respecting our old tradition, the company is going to pay bonus to all employees in the
unionised category, the statement said.