Despite gloom, Tata Steel Europe to run at 85% capacity: Nerurkar

Written by Arindam Sinha | Jamshedpur | Updated: Oct 3 2012, 06:58am hrs
Despite economic uncertainty looming over European countries like Spain, Greece, Italy, Portugal and Ireland, Tata Steel Europes operations are holding on to 80-85% capacity.

Tata Steel Europe that had scaled down output from its rated 16 mtpa capacity to 14 mtpa in 2011-12 will try to maintain it in the current year too. We are doing a good job in terms of cost reduction and in making improvements in production but the overall European market is very weak, but despite this we are maintaining 80-85% capacity, said Tata Steel managing director HM Nerurkar.

Also, despite the slowdown being experienced by many sectors in the Indian economy, Tata Steels Indian operations were running at 100% level, he said.

Having recently completed its brownfield expansion project the steel major is expected to touch an annual steel production of around 10 million tonne per annum (mtpa) from the current year.

Nerurkar said the current demand for steel in the country was average, even though steel prices had come down globally in line with downward movement of iron ore and coal prices.

Asked if ongoing brownfield expansions in the steel sector could result in overcapacity in the near future, Nerurkar said there could be some four to six months of oversupply that, over a period of time, would get corrected.

With some brownfield field projects on completion stage, the country is expected to produce 86 million tonne in the current fiscal compared with 74 million tonne in 2011-12.

While SAIL is in the midst of expanding capacity to 21.40 mtpa from 12.84 mtpa now, both Tata Steel and Essar Steel completed their brownfield expansion projects recently by reaching 10 mtpa capacity; JSW with 14.3 mtpa capacity is set to add another 3-4 mtpa by way of a brownfield expansion at its Dolvi unit.

Asked if recent steps taken by the government were sufficient to rekindle growth in the economy, Nerurkar said, I cant say sufficient, you require some more, the more important (thing) is that there should be results on the ground; where are the infrastructure projects; that must happen.

He, however, added that the good news was that the government had finally started acting after one-and-a-half years of inaction.