Tata Steel, the sixth largest producer of the metal worldwide, still digesting its mammoth acquisition of the Anglo-Dutch Corus group, has undertaken a slew of measures to boost efficiency and cut expenses to yield more than Rs 6,400 crore in savings.
In India, these steps brought savings of $118.77 million (over Rs 600 crore) during April-December 2008. The initiatives in European operations termed “Weathering the Storm” programme would be yielding cash savings of a total of £600 million (nearly Rs 4,400 crore) over a six-month period ending March 31, 2009.
Tata Steel expects its “Fit for the Future” programme in Europe to bring benefits of over £200 million per year. The initiatives are aimed at sustaining its assets over the long term and boosting competitiveness in Europe.
The initiatives in India include simple actions such as buying of coal in the spot market to save $16.4 million and a reduction in coke (fuel) bill in the blast furnace to save $12.6 million.
Though the company is far from fulfilling chairman Ratan Tata’s wish to preserve cash, Tata Steel’s 2.9 million tonnes per annum expansion plan continues to be on track. The group’s capital expenditure for 2009-10 amounts to $1.2 billion.
The group has, however, postponed capital expenditure at NatSteel Asia, which has operations in China, Thailand, Vietnam, Malaysia, Philippines and Australia, the company said in a presentation to analysts.