Tata Steel expects better Q4 sales

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Kolkata (PTI): Tata Steel today said it expects higher sales volume in the domestic market in the quarter ending March even as the world's sixth largest steelmaker targets to save about 600 million pounds this year from production cuts at its UK subsidiary Corus.

"Corus has cut production by 35-40 per cent just like any other European steel company. But it has initiated several short-term measures in terms of cost reduction, product mix, conserving cash and working capital reduction by which it would probably save 600 million pounds between now and end of the year," Tata Steel MD B Muthuraman said here on Friday.

Speaking about the domestic market, Muthuraman said that in the light of what was happening around the world, the demand situation was not that bad.

"We would sell more in volume terms in this quarter (Q4) compared to Q3 of this year and last quarter of the previous year," he told reporters on the sidelines of the inaugural session of the Indian Foundry Congress here.

"January was better by 26 per cent than December, December was better than November. We hope to sell 10-15 per cent higher in February this year compared to January," Muthuraman said.

Though, the company would sell more steel in the domestic market but profitability reflection might be different as prices are much lower than the previous year.

"Now prices are USD 500-600 per tonne compared to USD 800 to 1,000 per tonne during the same quarter last year," Muthuraman said.

However, he said, "We are slowly coming back. It is likely to take 6-8 months for the economy to revive."

Some sectors like automobile, consumer durables and household goods are not doing well, he said.

Speaking about acquisitions, Muthuraman said the company was not looking at new acquisitions now, but the announcement of raw materials acquisition in South Africa, Canada and Mouzambique would fructify in the next one to two years.

He added, "Tata Steel was focusing at two primary expansions of Jamshedpur and Orissa. Both projects are on schedule and going ahead in full-swing."

"There is no funding issue," Muthuraman said when asked for reaction in the wake of S&P downgrading the ratings of the company and its UK subsidiary. The Hindu