Tata Steel subsidiary signs a definitive agreement with China's HBIS Group

Published Date | 2019 January 30

Tata Steel’s inks pact with HBIS Group will increase business in South East Asia Steel Market and Propel the Steel Market in coming years.

Global: Tata Steel Global Holdings Pte Ltd (TSGH), an indirect wholly-owned subsidiary of Tata Steel, has signed definitive agreements with HBIS Group Co Ltd to divest majority stake in its South-East Asia business. As per the agreement which is signed between the groups in Beijing, China clarifies that the divestment will be made to a company in which 70% of the equity will be controlled by HBIS and 30% will be held by TSGH. “This deal between the two companies offers the South East Asian business, robust growth opportunities on ground of development and given the technical expertise and regional understanding of HBIS”, said- T.V. Narendran, CEO & Managing Director Tata Steel. HBIS Group Company Ltd was established in 2008 merging with Tangshan Iron and Steel Group along with Handan Iron and Steel Group of Hubei province. HBIS is a state-owned enterprise and a leading player in China's home appliance and automotive steel market. It also delivers for other critical applications such as nuclear power, marine engineering, bridges, and construction etc. Steel MarketAccording to BlueWeave Consulting, Steel production is the largest iron ore application. The growth in the steel sector has been driven by domestic availability of raw materials such as iron ore, cost-effective labour, rising disposable income, rapid urbanization, and increase in population. This trend is presumed to continue over the forecast period, and thus, assist the regional market in the near future. It has always strived for continuous modernization and up-gradation of older plants and higher energy efficiency levels. This merger will help in developing steel with superior characteristics that meet the customer specifications, is another key area which is expected to promise abundant scope for rapid growth and development. This will bring  opportunities for downstream and ancillary industry exist in areas like equipment manufacturing, foundries, flat and cold rolled products, fabrication, machining and precision equipment, appliances & white goods, auto components, fasteners, and kitchenware. Moreover, rising preference for utilization of alloys in consumer goods is expected to drive the steel industry According to BlueWeave Consulting’s upcoming report-“Global Steel Market Size, By Product (long steel and flat steel), By Application (Construction, Heavy Industry, Transportation, Consumer Goods), By Region (North America, Asia Pacific, Europe, Middle East & Africa, China), And Segment Forecasts, 2018 – 2025”- Global iron & steel market is expected to witness rapid growth owing to strong demand from construction and transportation sector over the forecast period. Rapid industrialization and urbanization, particularly in the emerging regions such as Asia Pacific and Central & South America are expected to drive the overall steel market. Major iron and steel producing countries are China, India, Brazil, Japan, Australia, South Korea, Germany, and Ukraine.  Asia Pacific is estimated to witness fastest growth rate and is thus poised to dominate the global market. Widespread application in heat exchangers, gas heaters, air handling units, and several other cooling, ventilation, and heating components are likely to propel Steel market growth over the forecast period. In addition, it is an excellent material for commercial, industrial, and residential HVAC applications.