Tata Steel is looking to save Rs 2,000 crore by cost-cutting and may be aided by falling prices of coking coal, a key raw material.
“Cost-cutting is a matter of habit for us as we always strive to better our reputation of being one of the most price competitive producers of steel,” Anand Sen, vice president, Total Quality management and Flat Products, told Hindustan Times. “Our target this year is to save Rs 2,000 crore through frugal manufacturing processes.”
The company saved over Rs 800 crore through focus on performance improvement in its Indian operations in 2008-09. The cost reduction amounted to $47 per tonne, 20 per cent higher than the targeted reduction.
Coking coal prices shot up in 2008 spurred by the boom in commodity prices, to almost $ 300 per tonne but the company has finalised its contracts for this year at a much lower level of around $120 per tonne.
Tata’s acquired European unit, Corus, is reeling under the impact of recession but Indian operations are safer, Sen said.