Slowdown may Hit Tata Steel’s EU, UK Ops

Real growth will most likely come from Asia, Africa & Latin America, says Ratan Tata Tata Steel has said the prolonged economic slowdown that led to a decline in steel consumption in the European Union and the UK is likely to affect the company's operations in those geographies over the next year or two.  "While Tata Steel's operations in India are expected to remain strong, its operations in Europe will continue to be under enormous stress for the next year or two until the Western European economy recovers. The unprecedented rise in iron ore and coking coal prices, coupled with the acute decline in market demand, will continue to negatively impact the company's European operations," Rattan Tata, chairman of Tata Steel, said in his statement in the company's annual report. "Restructuring and capacity rationalising initiatives are under way to reduce costs and under-utilisation. The real growth will most likely be in Asia, Africa and Latin America," he added. In contrast, steel demand is still buoyant in Asia and Africa where growth rates and investment levels are higher than in the West and where new sources of iron ore and coking coal are being developed, the chairman said.  "The demand for steel in India remains robust and in fact continues to outstrip supply. However, major greenfield projects which would substantially increase domestic steel capacity are facing enormous delays due to hurdles in land acquisition and approvals for necessary mining rights to feed these new plants," he added. By 2014, it would have a global steel capacity of 33.5 mn tonne and will add a further 3 mn tonne on full implementation of the Odisha project. Tata Steel's 2.9-mn tonne expansion in Jamshedpur, set to be commissioned in 2012-13, will take the capacity to 9.7 mn tonne per annum.