Even as the internal initiatives of Tata Steel to improve its performance have been on course, the result has not reflected in its Profit & Loss account. Weak market, said Koushik Chatterjee, group chief financial officer, Tata Steel Ltd, is the main factor holding results down.
Speaking to reporters on the sidelines of Cost Congress 2012, a two-day International conference on Total Cost Management (TCM), he said, that the company is focusing on working internally on productivity improvements and cost initiations, which it started almost a year and a half ago.
But the market, he says, is much more challenging than the pre-crisis level,” said Chatterjee. Commenting on the results of the initiative so far, he said, “The results are coming. It is a question of how the market is behaving. The internal results are not showing in the P&L just now, because the market is weakened.
There will be a time when the market will stabilise, which is what we are expecting.” However, he refused to give any guidance on when the company expects to see the market and the company's performance improve according to this. It is to be noted that Tata Steel reported a consolidated net loss of Rs 363.9 crore, including for Tata Steel Europe Ltd, which was formerly known as Corus, for the second quarter (July-September), 2012. The company had posted a net profit of Rs 212 crore for the corresponding period of last year. He added that while the markets have gone adverse even more, the company is focusing on enhancing its internal initiatives on a continuous basis to a much higher level. “We will see what happens in the next six months,” he said. The internal improvement initiatives include focusing on the supply chain, looking at consolidation of sites, looking at investing in right capacity on the product mix, significant productivity improvements, consolidating the product mix to a few sites. This would make the supply chain more efficient and the consolidated sites would bring in the benefits of leverage, he said. According to recent reports, the company has plans to cut around 900 jobs in the United Kingdom, in the backdrop of the weak European market. However, Chatterjee said that the job cuts are not the goal of the company though it has announced its plans recently and is going through the process at present. The company reported consolidated net sales of Rs 33,867 crore for the second quarter ended September, this year, as against Rs 32,507 crore last year, according to earlier reports.