Tata Steel, India's biggest producer, is to cut staff and energy costs as it reduces output to combat a plunge in prices.
The company plans to save at least 350 million pounds (US$525 million) at its United Kingdom-based Corus Group and 3 billion rupees (US$60 million) at its Indian operations by March 2009, Managing Director B. Muthuraman told Bloomberg News in Mumbai yesterday.
The credit crisis has stifled economic growth worldwide, damping demand for metals.
Corus, which generates more than two-thirds of Tata's output, said European steel makers were facing a "tremendous challenge" after a collapse in global demand.
"There is a downturn in the economy," Muthuraman said. "We want to make sure we weather this storm well."
Tata Steel, which last month had its credit-rating outlook cut to "negative" by Moody's Investors Service because of the challenges facing Corus, has plunged 84 percent this year, making it the second-worst performer on the benchmark Sensitive index. Corus joins ArcelorMittal, the world's biggest steel maker, in planning cuts. Corus has said production by March 31 will be 30 percent less than planned after sales declined significantly since September.
Iron-ore contract prices may halve to US$46 a ton next year as demand from China slumps, the Australia & New Zealand Banking Group said last month. Cash prices for iron ore to China have slumped 59 percent.
(Shanghai Daily December 4, 2008)
