Tata Steel sees weak final quarter but demand set to rise
TATA Steel, which supports hundreds of jobs in the West Midlands, has reported a loss for the final quarter of last year as poor growth figures weakened demand for the raw material.
The company, which is the largest steel producer in India, saw a net loss of £77m in the three-month period. The upheaval in the Eurozone countries – where a large portion of the business operates – contributed to the weakened position.
However, the company is optimistic the situation will pick up during the first half of this year as demand grows.
Mr HM Nerurkar, Tata Steel managing director, said operations in India had been better although volumes had been relatively flat. He said the decline had been minimised by a strong focus on cost saving measures.
“Long product volumes dropped marginally due to planned shutdowns, but we increased our market reach, recording our highest ever quarterly retail long products sales,” he said.
“We expect steel demand to improve on expectations of the RBI relaxing monetary policy to aid growth and investment. An improvement in operating performance, coupled with a number of new marketing initiatives, should increase profitability at the South East Asian operations.”
Karl-Ulrich Köhler, managing director and chief executive of Tata Steel Europe, said the December quarter marked the height of the cyclical cost-price squeeze.
“Tata Steel was one of the first steel companies in Europe last year to start adjusting its output and configuration to the slowdown in the recovery. The turnaround programme in our Long Products business is well on course for completion by the end of the financial year, as planned,” he said.
“Similar measures have been taken elsewhere in the company, most recently at some of our tubes operations in the Netherlands and the UK. Through our Step Up & Save initiative we are accelerating cash conservation in expectation of muted but stable demand in our core markets in 2012.”