Tata Steel working on reverse strategy for European operations

Tata Steel, which had considered exporting slabs to its European facilities at the time of acquisition, as part of the integration process, is now working on a reverse strategy.

“The Indian market is good, and selling it here is more remunerative. We could have explored the option of exporting slabs if we had a surplus. What we are now working on is how to bring finished products from Europe. These are quality products required on a year-on-year basis that are not made here. Examples would be steel for transformer, skin panels for cars, etc,” Tata Steel managing director H M Nerurkar, said.

At the time of acquisition of Corus in 2007, one way Tata Steel had planned to make the high-priced deal work was to source low-cost slabs from India and finish it in Europe. It was meant to be the long-term plan.

The current strategy would, however, help improving capacity utilisation in Europe. “This will be irrespective of the economic situation. We don’t plan to ship material here because the market is better. But these will be quality products,” Nerurkar explained.

Tata Steel, unexpectedly, posted a consolidated net loss in excess of Rs 600 crore, on account of its European operations which was pulled down by a weak market and high raw material cost. While the company’s Indian operations are largely covered by captive mines, the European operations don’t have raw material security, as yet.