Next 12-18 months difficult for Tata Steel
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Last Updated: Monday, August 10, 2009, 22:00
Mumbai: Tata Group patriarch Ratan Tata has said the next 12-18 months would likely be "difficult and challenging" for Tata Steel, but hopes that it would come out stronger from the difficult period to become a more cost- effective manufacturer of the alloy.

"The past year and probably the next 12-18 months are likely to be difficult and challenging for Tata Steel," he wrote in a letter dated May 31 to the shareholders in the company's annual report.

Tata said the effects of the global economic downturn seriously impacted the company's global operations in the second half of the last fiscal.

"The demand for steel declined by 26 percent in UK and Europe in the third quarter compared to a year earlier, and after a further contraction in the fourth quarter, demand had fallen by 57 percent in UK and 44 percent in Europe compared with a year ago."

Indian operations witnessed a less pronounced drop in demand of 11 percent in the third quarter, reflecting the reduced activity in infrastructure and commercial vehicles, he said.

Tata Steel, he said, has taken aggressive steps to meet the challenges of these difficult times through major initiatives in cost reduction, process improvement and production rationalisation.

Tata Steel would need to make substantial investment in a phased manner to secure raw material from its overseas mines, it said, adding that the company was also evaluating several other mineral projects in Brazil and Australia.

Tata Steel India is self-sufficient in iron ore and with regard to coking coal, the company is self-sufficient to the extent of 52 percent.

Bureau Report

First Published: Monday, August 10, 2009, 22:00

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