It is my privilege to write to you as the Chairman of Tata Steel and I feel honoured toaccept the responsibility to Chair the Board. I am happy to present to you the secondIntegrated Report of Tata Steel for the Financial Year 2016-17. While the global economyis improving with global GDP growth projected to pick up from 2.9% in 2017 to around 3.1%in 2018-2020 it remains susceptible to geo-political and other macroeconomic risks.Meanwhile India is expected to become the world's _fth largest economy in 2017surpassing UK and France and the world's third largest economy by 2023 surpassing Japanand Germany. India's GDP is projected to rise from USD 2.2 trillion in 2016 to USD 3.6trillion by 2020. This augurs well for businesses that are focused on domestic growth inthe future.
The global steel industry continues to witness challenging times though the performanceof the industry has been better in the Financial Year 2016-17 with improved realisationsand a more disciplined supply side response. According to the World Steel Associationglobal steel output will be tapering in the next year and the slowdown is expected tocontinue through 2035 as countries around the world start to rein in output while demandretreats. Given the current stage of development of the Indian economy and the likelygrowth path for the country's economy in the next decade the steel demand in India willwitness significant growth in future. While the Steel sector in India is financiallystressed currently the Government of India has outlined its intent for ensuring long-termviability of the sector through the recently announced National Steel Policy 2017. Theconsolidated Profit after Tax before exceptional items for Tata Steel was `4020 crore in2016-17 compared to a loss of
`1948 crore in the previous year on the back of improved realisations acrossgeographies ramping up of capacity in Kalinganagar and restructuring initiatives inEurope. Going forward Tata Steel's strategic priorities will be to focus on the Indianmarket achieving operational excellence and deliver value-added and differentiatedproducts to its customers. Additionally Tata Steel Europe is currently pursuing thepension restructuring programme in the UK and is hopeful of concluding it soon. It will bethe endeavour of the Company to continue to improve the performance on year-on-year basisand provide better returns to the shareholders and create a strong Balance Sheet that canfund aspirational growth for the Company.
One of the core elements of Tata Steel Group's operating strategy has been its focus onsustainability and the environment. The Company is committed to minimise its impact onclimate change and is continuously working on the strategy to reduce the carbon footprintof the business. Tata Steel Group has continued its tradition of caring for thecommunities and stakeholders through its Corporate Social Responsibility programme. Therewere a number of initiatives undertaken during the year including Samvaad the nationaltribal conclave in Jamshedpur and the thousand schools project in Odisha. Tata Steelremains committed to improving the quality of the lives of the communities where itoperates. Finally I would like to thank you for the unstinted support and unwaveredconfidence in the Company. I would also like to thank the government customerssuppliers lenders for their continued support to the Company and also to the employeesunions and the management team for their deep level of commitment to the Company. I lookforward to your continued and valuable support in taking the Company to greater and newerheights in the future.
Chairman of the Board
Mumbai May 16 2017