The joint venture agreement between Tata Steel Europe and thyssenkrupp will allow Tata Steel India to focus on doubling its production capacity, both organically and through acquisitions. This is according to Tata Sons chairman Natarajan Chandrasekaran.

Tata Steel Europe and thyssenkrupp signed on Wednesday a memorandum of understanding to create a 50/50 JV (see related article). “From a Tata India perspective, this is a huge opportunity to focus on our very aggressive expansion plan,” Chandrasekaran said at a press conference announcing the JV deal, monitored by Kallanish. Tata Sons is prepared to “… partner with” Tata Steel India to help ensure the steelmaker grows and captures market opportunities, he added.

One of these opportunities will be to increase deliveries to the Indian automotive sector, Chandrasekaran observed. The European JV, meanwhile, will require no financial input from Tata Steel India thanks to its sustainable structure, he added.

Speaking at the same event, Tata Steel Group Executive Director Koushik Chatterjee said the production capacity doubling would occur over the next five years. Asked about whether Tata’s Indian operations are to be ring-fenced from the proposed JV, he commented: “This JV runs independently from shareholders… The ability to handle a downturn is a very important element in any steel company… we’re clearly positioned to be standalone and have robust cash flow.”

Tata Steel’s India-based steel deliveries grew 28% on-year in the first fiscal quarter through June to 2.75 million tonnes due to the ramp up of the Kalinganagar steelworks. Revenue surged 40% to INR 14,422 crores ($2.26 billion). Comprehensive income, however, dropped -69% to INR 377 crores.