Friday, February 14, 2014

News: Tata Steel's differentiated products making a difference

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The European operations of Tata Steel produced the largest volume of liquid steel on a like-for-like basis for more than five years.

The Indian-owned steelmaker, that operates important sites in Rotherham and Stocksbridge, published results for the nine months and third quarter ended December 31 2013.

In Europe, turnover for the nine month period rose to £5.9 billion, a 2.5% increase on the same period last year. Turnover in the third quarter of the financial year was £2.03bn which was 2.1% down on the previous three months but 14.3% up on the same period in the year before.

EBITDA (earnings before tax) for its European operations in the three months to December 31 was at £87m, a vast improvement on the loss of almost £50m reported in the same period last year.

Liquid steel production in Europe increased to 3.91 million tonnes from 3.86 million tonnes in the previous quarter. Production was 19% higher than the 3.29 million tonnes produced in the same quarter last year. Tata said that the upgraded asset base produced the largest volume of liquid steel on a like-for-like basis for more than five years.

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In 2012, Tata Steel Europe outlined a new strategy to target demanding industries, like automotive, aerospace, mechanical engineering and construction. South Yorkshire is home to the production of specialist steel used in aerospace and a restructured bar business now focusing on supplying hi-tech products.

Sale volumes of differentiated products rose by 14% in the nine month period to December 31, compared to the previous year, which Tata said highlighted the success of its strategy in a fiercely competitive market.

Following significant investment already in South Yorkshire, last year Tata confirmed that it would invest a further £15m in a cutting-edge VIM furnace at Stocksbridge that will allow Tata Steel's Speciality Steels business, which already supplies steel to aircraft engine and airframe makers, to further develop relationships with its customers and expand its product portfolio in aerospace and oil & gas industries.

Dr Karl-Ulrich Köhler, MD & CEO of Tata Steel in Europe, said: "The asset base we restored and upgraded last year has been running at stable rates, which has led to the continued year-on-year turnaround in financial performance.

"The work to enhance our product and service profile and our focus on cost and cash flow continued, supporting the year-on-year improvement in EBITDA, despite lower margins. With European economic indicators improving, these efforts will better enable us to benefit from any growth in European steel demand, which remains at historically low levels."

Tata Steel has recently begun recruitment for its next batch of apprentices in South Yorkshire.

Tata Steel Europe website

Images: Tata Steel

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