The Tata Steel group has devised a strategy where two of its companies, Tata Steel Europe and India, are to help Tata Steel Thailand come back to profitability. The schedule to do so stretches for about 18 months.
Koushik Chatterjee, group chief financial officer, had in May said the strategy was to introduce new products in the Thai market. He had also said that high-end speciality steel from TSE would be brought to the Thai company. That apart, Tata Steel India has now launched its successful long-steel brand, Tiscon, in Thailand to help the company. Tiscon was developed in India. Long steel products include bars, re-bars, wire-rods, etc. The move is expected to increase the market share of TST in the local market and, thereby, help bring back the company to profitability.
The Thai subsidiary has been in trouble for some time. It had posted a net loss of Rs 162 crore (baht 976 million) for the year ended March. The company, in 2009, reported a net loss of Rs 8.9 crore (baht 54 mn). For the first quarter of 2011-12, ended June 30, the company managed to post a net profit of just Rs 0.33 lakh (baht 2 mn), versus a net profit of Rs 4.64 crore (baht 28 mn) in the same quarter last year. Sequentially, i.e. in the fourth and last quarter of 2010-11, TST had made a net loss of Rs 19.75 crore (baht 119 mn).
Tata Steel India and Europe's help is expected to show results. TST is also changing its product mix. The company had been present in the long-steel segment. It will now strengthen its position in the market with these Tiscon brand. Also, close to one-third of its capacity is to be used in making speciality steel, a higher margin business.