Monday, May 21, 2012

News: Low demand continues to affect Tata Steel


A low demand for steel as a result of the financial problems in the eurozone has played a part in Tata Steel Europe's EBITDA (earnings before tax) falling to $349m for the financial year ending March 31, 2012. This is down from $922m in the previous year.

The Indian-owned firm operates specialist steel producing sites in Rotherham. The steel, predominantly stainless and low alloy grades, is used in landing gear and aircraft engines.

The fall in earnings was despite turnover in Tata Steel Europe for the year increasing to $16.15 billion from $14.52 billion and sales increasing by 3.7%.

This was due to higher raw material costs.

Dr Karl-Ulrich Köhler, MD & CEO at Tata Steel Europe, said: "The continuing eurozone crisis kept EU steel demand well below pre-crisis levels in the March quarter. In addition, operational difficulties that affected strip product output caused the European operations to perform worse than in the year-earlier period. But there was an improvement in performance over the third quarter, when the cost-price squeeze caused by high raw materials volatility was at its most extreme."

A £6.5m investment in aerospace steel production has recently completed at Tata Steel's South Yorkshire sites. It will boost output of specialist steels by 30% and has led to the creation of eight new jobs. The scheme includes two new vacuum arc remelting (VAR) furnaces and specialist testing equipment, as well as a new ultrasonic immersion testing facility.

Last month GE Aviation became the latest aircraft engine maker to endorse Tata Steel's manufacturing capabilities, approving the laboratory testing procedures at laboratories in Rotherham and Stocksbridge. The company already has approvals from Rolls-Royce, Pratt & Whitney and Snecma (part of SAFRAN group).

Tata Steel Europe website


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