T.V. Narendran, CEO Tata Steel Ltd: “I believe we need to change as a steel company”
As CEO & Managing Director, T.V. Narendran is responsible for all steel activities of Tata Steel Ltd, the parent company of which Tata Steel Nederland is part. He is also chairman of the Tata Steel Nederland Supervisory Board. Because of these positions he is regularly in the Netherlands and he likes to share his view on the challenges and changes that Tata Steel Nederland faces, and why this is good and logical.
“I regularly spend one or more days in the Netherlands,” says Narendran. “Not only for formal meetings, but also to talk with people who are directly or indirectly involved with the company and our IJmuiden steelworks.”
A lot has happened around Tata Steel Nederland in recent years. In a business sense with, for example, COVID-19, the war in Ukraine and the European economic situation, but especially with regard to the position of the company in the local community. Narendran: “The latter in particular has my attention. I want to understand the situation and the concerns as best as possible. For me, every visit is about listening and learning.”
Proud of IJmuiden
“The IJmuiden steelworks is one that we have always been proud of,” says Narendran when talking about Tata Steel’s largest operation outside India. “It is a factory that has generally done very well, financially and operationally. It is also a site with a future.”
Europe is valuable to Tata Steel, and Narendran sees the Netherlands as a bridgehead. In Europe the company faces an advanced market. Customers are critical and demanding. “Europe is clearly undergoing an important transition. The questions and expectations of society, government, customers and local residents are changing. We cannot and must not ignore this. In this sense, Europe is ahead of India, because concerns about the climate and living environment will also come into play there.”
I believe we have to change as a steel company. If we can adapt to the changing expectations of society while maintaining our competitiveness, I think we have done a good job.
“But to manage expectations: we can be the cleanest and greenest steel company in the world, we will always be a steel company. So there will never be zero noise or emissions. A steel manufacturing operation will never become an electronics factory.”
Strategic advantage
Talking about the importance of steel and the transition to green steel, Narendran calls for government support: “Steel is inextricably linked to the world we live in. Without steel there would be no washing machines, food and homes or home furnishings. Without steel, there would be no green energy, sustainable industry or electric transport. And not a single steel company in the world can realise the transition we all want to make without government support. That applies to the entire steel industry, not just to us. You now see this happening elsewhere as well. Moreover, over the years you have seen that governments have played and wanted to play an active role in transitions in general.”
Narendran believes that Tata Steel Nederland has a strategic advantage to successfully make the transition to green steel: “The factory is a leader in the industry and is located in one of the best locations in Europe for the future. Due to our location on the coast and our own seaport, we have direct access to sea and therefore the supply of raw materials and a good connection to customers. Wenckebach saw this very clearly 100 years ago when he founded this site. And soon there will also be a direct connection with offshore wind power.”
Compared to competitors, we have a clear case in IJmuiden for the transition we want to make with our Green Steel plan and I hope that the Dutch government sees the logic in it.
Narendran believes it is only logical that the Dutch government asks many critical questions in that process. “Their view is not essentially different from that of banks or Tata Steel itself. However, apart from the money we will put in our Green Steel plan ourselves, we will need government support, just like our competitors in Germany, Belgium and France. And while we establish a European level playing field as much as possible, I understand that the Dutch government will hold us even more accountable for our responsibility to become more sustainable and that there must be confidence in our intentions.”
Europe leads as a green steel market
In the 35 years that Narendran has worked in the industry, he has learned that it is important to be alert to disruptions – from new players or from more strategically operating countries and regions. “These are not new phenomena in themselves. You must continue to look at where your own added value lies. It is constantly shifting,” he says.
Narendran analysing: “The U.S. steel company Nucor, for example, decided to use the electric arc furnace at the end of the 1970s and to work in a new way. It is now one of the most valuable steel companies in the world. From the late 1980s onwards, a large part of the aluminum industry shifted to the Middle East because that region focused on lower energy costs. Something that seems to become even more important in the future.”
Against the backdrop of the shifting dynamics in the global steel industry, Narendran believes in Europe: “Combined with the sophistication of the European market and the CO2 policy framework, I think Europe has an advantage over the rest of the world.”
It is highly conceivable that the European market will grow into one of the larger green steel markets in the world, and that the evolution of the European steel market will likely determine trends in other regions.
“For example, we can shift the value of steel more from the value of raw materials to the value of steel for customers. With a deeper customer embedding and through value analysis and value engineering, we can help our customers better utilise the added value of steel. As Tata Steel and Tata Steel Nederland, we can certainly lead the way in this. That is good for the company, for the Netherlands and India, for our prosperity and from a geopolitical point of view,” Narendran concludes.