After selling off its long products business, Tata Steel Europe is now planning to become a premium strip player and concentrate on improving its performance, a senior company official said today.
"Following the sale of long products business, Tata Steel Europe would focus on being a premium strip player and concentrate on improving its performance. The strategy for exploring further strategic consolidation in Europe is a step in that direction," Tata Steel Group Executive Director Koushik Chatterjee said here.
Tata Steel's Europe division was sold at a loss of Rs 3,296.48 crore to Greybull Capital LLP in the quarter ended June 30, 2016.
Also Read
Chatterjee said the company's recent restructuring and cost-cutting initiatives in the UK, along with weaker sterling, had helped the business to report better performance in the quarter.
Meanwhile, Tata Steel Europe said it is in discussion with industry players to explore a strategic collaboration through a potential joint venture.
The company in March announced plans to sell all its UK operations after years of losses. Tata still owns the Port Talbot steel works in Wales, which employs more than 4,000 workers, and 2,000 workers at other plants in Hartlepool, Rotherham and Stocksbridge.
Tata earlier said it is in talks with companies, including Thyssenkrupp, for a joint venture.
"We are open to strategic conversation with partners. We continued to be in discussion with industry players to explore options for a strategic collaboration through a potential joint venture. Appropriate disclosure in this regard will be made in due course," Chatterjee said without giving any time-frame.
The company's UK business is currently progressing with divestment of the specialty steel business and the pipe mills in Hartlepool. The shortlisted bidders are being given access to due diligence and management meetings.
Tata Steel UK also continues to be engaged with several stakeholders, including trade unions, the trustee and the UK Government to find a structural solution to the pension exposure of the UK business, he added.
Hans Fischer, MD & CEO of Tata Steel in Europe, said: "We are making progress as a result of business improvement initiatives and the restructuring announced last year. We remain committed to investing in our customers through new product development and enhancing our manufacturing capability.
"In July, we started construction of a new slab caster in IJmuiden which will enable us to make more higher-strength steels, particularly for car manufacturers.
"Modest growth forecast in European steel demand this
year is still being undermined by increased imports, which is leading to continued declines in domestic deliveries. That's why it's vital we continue every effort to improve our competitiveness," Fischer added.
The company, however, warned that the Brexit vote could affect economic growth in the UK.
"A weaker pound is expected to improve UK's short-term competitive position on exports, however, it will add to cost pressure due to higher cost of raw materials purchased in US dollars," it added.
