Speaking at the 102nd annual general meeting of the company, Tata said, The sector was badly hit firstly by an increase in iron ore and coal prices that put pressure on margins of all the steel companies, and secondly by the global meltdown that impacted the demand for steel.
During this period, world steel consumption contracted by 13%. However, consumption in India and China increased by 4%. Nevertheless, there are some signs of recovery in terms of iron ore prices and firming up of prices in Europe.
Tata, who is confident that the company's Indian operations would continue to grow, said he hoped Tata Steel to reach 80% production capacity on a consolidated basis by the end of this year and attain the full capacity by next year.
Tata Steels European operations had already cut 40% of their production following the demand slump in the continent. The company is looking at its own raw material properties in Africa, Brazil and Canada to support the European operations. By 2020, we will have about 50% of raw material security from our own resources, said Tata. Tata Steel currently has 25% of raw material security.
Accepting that the current economic downturn would continue to be a challenge for the company, the chairman said there is great potential for growth for the steel companies in India. "The per capita consumption of steel in China is 318 kg. In Brazil, it is 100 kg and in India, the per capita consumption is just 44 kg, showing great potential for growth," Tata said. The company is currently focusing on increasing its capacity in Jamshedpur to 10 mtpa.