'European economy continues to be a concern'

Tata Steel’s operations were affected by the European financial turmoil last year and the company is “doing everything” to withstand the effects of the crisis, Chairman Ratan Tata said.

Last year was a tough one for the company and the steel prices continue to fall and margins were squeezed. “We are in abnormal times and all I can tell you is that when we acquired Corus no one could have predicted the crisis. We are doing everything to go through this crisis,” Tata said while addressing Tata Steel’s 105th and his last annual general meeting before he retires later this year.

Tata said he could only hope there was no more downturn in India and that the impact of downside in Europe was made up by upside in India. “There is only much a company can do and rest depends on the market, “ he said.

Earlier last week, ratings agency Moody’s downgraded Tata steel to negative and changed outlook on Tata Steel Europe’s rating from B2 to B3. Another ratings firm Fitch revised its rating for Tata Steel India and Tata steel Europe to negative from stable.

The company announced a drop of 89 per cent in its net profit for the quarter ended June 30 on Monday.

The company has completed the 2.9-million-tonne capacity expansion at Jamshedpur and will go into production soon boosting the turnover of the Indian parent.

Tata said assumptions had to be made that steel would continue to be a primary material for infrastructure and construction sectors.”It has a connectivity with economic growth or downturn,” Tata said. “Hope Asia will regain momentum and China and India will continue to grow.”