Operating in a depressed and uncertain economic situation in Europe today, Tata Steel Europe is hopeful that the plan it has drafted for itself would position its operations accurately as a differentiated market player, leading the way for a revival in five years.
Talking to FE on Saturday evening after inaugurating a special exhibition on Tata Steel founder Jamsetji Nusserwanji Tata and on Tata Steel, titled ‘100 years of steel making’, Tata Steel Europe managing director and CEO Karl-Ulrich Kohler said, ?We are running at 80%-85% of our capacity (16 million tonne per annum), but whether we are doing well or not is not so important today. In Europe, the current demand for steel is at around 80-85% of the pre-crisis level (2007).?
Kohler said the aim was to adapt the group in Europe to a size and scale of productivity using ingenuity in terms of innovation and differentiation so that Tata Steel Europe could make it to the marketplace with special grades of steel and other specialties, all in a high productivity environment.
?We are on a journey now, adapting to our market, striving for stability under a very adverse economic situation,? said Kohler, adding that the journey could be one of three to five years, though ?realistically it should be five.?
Asked if the turnaround was possible within that time frame, he said, ?We are working very hard on that and are following a plan.?
Compared to the price Tata Steel had paid when it bought Corus (now Tata Steel Europe) for $13.6 billion in 2006, HSBC Global Research had recently put the enterprise value of Tata Steel Europe at $2.36 billion and Bank of America is said to have valued it at around $3.3 billion. Asked if leveraging fresh loans would be any problem, Kohler said, ?That?s a question of allocation of finances (within the group); the problem is to make a sound business proposition and position yourself accurately as a differentiated market player in a demanding market.?