Tata Steel, world's sixth largest steel maker, aims to treble profit margins at its European subsidiary Corus in over five years, notwithstanding the global economic downturn impacting the industry.
"Tata Steel is aiming to triple profit margins at Corus over five years...," the Financial Times reported on Wednesday.
Quoting Tata Steel Managing Director B Muthuraman, the daily said the target could be reached partly by improving manufacturing procedures at the Corus plants spread across Europe. The Indian conglomerate Tatas had acquired the Anglo-Dutch steel maker Corus for about $13 billion last year.
Under Muthuraman's plans, the report said, earnings before interest, tax, depreciation and amortisation for Tata Steel as a whole would rise to 30 per cent of sales by 2013, up from what he is estimating will be about 14 per cent this year.
According to the Financial Times, EBITDA margins in Tatas Jamshedpur plant are 36 per cent, compared with 7 per cent in Europe, where the firm has 80 per cent of its worldwide output of an expected 26 million tonnes this year.
"He (Muthuraman) hopes the EBITDA margin in Europe will rise to 20-25 per cent," the report added.
The daily said that Muthuraman's calculations are based on the assumption that the price of standard steel is about $500 per tonne.
Few months ago, the rates were hovering as much as $1,250 a tonne.
