Tata Steel is likely to slash production in Europe further in the next few months if steel orders weaken, Karl-Ulrich Köhler, CEO of Tata Steel in Europe said, Economic Times reported.
The world’s seventh steel maker by ranking, had already cut production capacity from 85-90% in the first half this year to 80-85% currently, Köhler said.
He also stated, “We don’t exactly know where this is going to go in the next couple of months.” He said this during a press briefing, talking about the fragile economic situation in Europe. “If it’s a temporary thing we will find temporary solutions. We are not producing to stock, we are reducing stocks, that’s part of our efficiency programme and if the order book is not supporting production we can certainly reduce further,” he said.
In September, Tata Steel’s European unit, shut down one of its four blast furnaces in Scunthorpe, United Kingdom. Another blast furnace at the site was idled a few years ago on a long-term basis, while the two remaining furnaces are currently operating. “It is clear, the summer has been difficult now, from October we will see how the end of the year develops,”
Köhler said. "The next difficult month will certainly be December. How early do people stop their activity this year? That is one of the questions," he opined.
The steel major is planning to invest $8 billion in India, also to expand operations, and 2 billion pounds ($3.15 billion) in Europe over the next few years. “In Europe we will invest clearly above depreciation level and we’ll do that for the next four to five years,” Köhler said. Tata Steel Europe is the second-largest steel producer in Europe with an annual capacity of 18 million tonne.
The European operations of Tata Steel comprise Europe’s second largest steel producer. With main steel making operations in the UK and the Netherlands, the company supply steel and related services to construction, automotive, packaging, material handling and other demanding markets worldwide.
Tata Steel is the world’s top 10 steel producers and the combined group has an aggregate crude steel capacity of more than 28 million tonne and approximately 80,000 employees across 4 continents.
